The notorious drug-cartel boss Joaquín Archivaldo Guzmán Loera, also known as El Chapo, faces a June 25 sentencing following his recent conviction on federal drug conspiracy charges. The verdict, which Guzmán’s lawyers have vowed to appeal, followed a 10-week trial full of lurid revelations that corresponded almost too perfectly with pop-culture stereotypes of an evil drug lord reigning south of the border.
Meanwhile, sitting in federal jail a few miles away from the Brooklyn courtroom where Guzmán was convicted, and awaiting his own sentencing, is a 46-year-old ex-computer programmer named Paul Calder Le Roux. He is a lesser-known former drug kingpin, but his methods may tell us more than Guzmán’s about where the modern drug-cartel model is headed.
Le Roux, a South African who also holds Australian citizenship, has admitted to building an international drug and arms trafficking organization that operated for nearly a decade on six continents.
In terms of revenue, the hundreds of millions of dollars that Le Roux made in his career fell short of Guzmán’s billions. In terms of body count, Le Roux has acknowledged arranging seven murders, while prosecutors tied Guzmán to 30. Yet Le Roux represented something new and potentially more powerful than the drug syndicate epitomized by El Chapo: Here was a cartel headed by a technology-driven founder who leveraged the Internet to create a fully globalized operation, one that expanded from online pills to money laundering to methamphetamine trafficked out of North Korea and arms deals with Iran.
Le Roux launched his organization online in 2004 by selling prescription painkillers to American customers under the name RX Limited. Like many modern tech start-ups, RX Limited “scaled” its business by outsourcing its primary labor to contractors in places such as Oshkosh, Wis., and Detroit. But the workers in this gig economy were American doctors and pharmacists, recruited to write and fill prescriptions for orders placed on RX Limited websites. The orders were shipped out by overnight delivery — no tunnels, secret airstrips or drug mules required.
Le Roux himself steered clear of U.S. soil, controlling the business from his laptop in the Philippines. Seeking to accelerate his company’s growth, Le Roux followed the corporate playbook of diversifying into new markets. In his case, that meant plowing profits from RX Limited into arms dealing, cocaine and methamphetamine trafficking, black-market gold dealing, and even funding his own militia in Somalia to create a satellite base for drug production.
To protect his burgeoning empire, Le Roux again turned to a globalized pool of workers, this time consisting of ex-military private security contractors, who became his hired assassins. One of them was former U.S. Army Ranger Joseph Hunter, who in 2016 was sentenced to 20 years for plotting to kill a Drug Enforcement Administration agent. Hunter sits in the Metropolitan Detention Center in Brooklyn, awaiting sentencing for murdering a real estate agent in the Philippines in 2012 at Le Roux’s behest.
The DEA chased Le Roux for half a decade, led by a pair of dedicated but comically undersupported investigators in Minneapolis, Kimberly Brill and Steven Holdren. While Brill and Holdren were using beat-up desktop computers and teaching themselves about Internet architecture, their target was building his own encrypted email servers and designing submarines to deliver drugs. Eventually, Le Roux’s activities became so over the top that other parts of the DEA began paying attention. In 2012, the agency’s elite 960 Group lured him into a sting operation in Liberia, where the authorities transferred him to U.S. custody.
Unlike Guzmán, Le Roux has never faced a trial. After his arrest, he agreed to cooperate and helped the DEA capture some of his former contractors, including Hunter. Le Roux is scheduled to be sentenced this spring, and faces a possible 10 years to life.
The technology-driven cartel model that he pioneered, however, is only in its infancy. His was a road map for a new kind of organized crime, fully exploiting the power of the Web. To combat it, agencies such as the DEA will need more Brills and Holdrens, investigators willing to embrace technology and to dig into the grimy corners of the Internet, where dark markets and cryptocurrencies can offer economies of scale found on the right side of the law.
Before Guzmán’s capture, he had begun to adapt to the high-tech future, hiring an IT contractor to build an encrypted communication network for his organization. When U.S. authorities persuaded that contractor to cooperate, including by infiltrating the system he had designed, it unlocked the keys to El Chapo’s kingdom.
Paul Le Roux, by contrast, wrote his own encryption system. In the future, it may increasingly be the IT experts who are sitting atop the cartels, operating in the digital shadows and guided by a mantra straight out of Silicon Valley: Move fast and break things.