FOUR IN BANGKOK CHARGED IN NEW JERSEY HEROIN SEIZURE

Federal authorities said yesterday that they had seized 126 pounds of
heroin hidden in bales of cotton towels on a container ship docked in
Elizabeth, N.J., and announced charges in the case against four people
tied to a Burmese warlord who has long been a dominant force in the
Southeast Asian heroin trade.

The four, who were arrested by Royal Thai Police in Bangkok on Jan. 19,
include a wife of the warlord, Khun Sa. Officials said they were being
held in Bangkok pending an extradition request, and were charged with
conspiracy and importing heroin in an indictment that federal
prosecutors filed yesterday in United States District Court in Brooklyn.
The heroin was seized last month.

The prosecutors and officials from the federal Drug Enforcement
Administration said the charges, coming 10 days after the arrest in
Thailand of one of Khun Sa's key lieutenants, represented a significant
blow to his organization, which they say has long dominated heroin
production and trafficking in the region.

"Definitely the organization is crumbling, but we feel they are still
very powerful in Burma, where he is still operating," said Felix
Jimenez, the special agent in charge of the drug agency's New York
office.

The indictment stems from a nine-month operation in which an undercover
D.E.A. agent won the trust of the four suspects and convinced them that
he was a major figure in New York's Chinese underworld, law enforcement
officials said.

The agent, who speaks Mandarin and the Yunnanese dialect, met with the
suspects in Thailand in June and October and, after returning to New
York in the fall, kept in almost daily telephone contact with them, one
official said. He played his role so well, the official said, and they
were so keen on making him their wholesale distributor, that they
provided the heroin on consignment, an extremely rare move in Asian drug
deals.

The heroin, from the mountains of Myanmar, formerly known as Burma, was
shipped from the capital, Yangon, officials said. It arrived on the
container ship Cho Yang Phoenix in Port Newark in Elizabeth on Jan. 11
and was seized after D.E.A. and Customs Service agents searched the
ship, court papers said. The heroin was found secreted in 12 bales of
cotton towels.

Mr. Jimenez said the case was also significant because the heroin trade
in New York, and in the rest of the United States, had become dominated
by Colombian and Mexican heroin, rather than the purer so-called China
white from Southeast Asia that dominated in the 1980's and early 1990's.
The market changed when Colombian traffickers, who had glutted the
United States with cocaine, began producing cheaper heroin and flooded
the United States with it.

The case underscored the efforts of traffickers in Southeast Asian
heroin to win back a piece of the market, officials said, and revealed
new trafficking patterns and routes that could provide investigators
with a road map for future cases. It was investigated by a special drug
agency unit called Group 41, which focuses exclusively on Asian heroin
traffickers.

Prosecutors and D.E.A. officials identified the woman who they said is
one of Khun Sa's wives as Hiu-Lan Peng. They said the woman was also
known as Ms. Hung and was in her 50's, though they could provide no
exact age or address for her. The officials said that the warlord,
because of his power and standing, had many wives, and that Hiu-Lan Peng
was known as one of the "minor wives," although some press reports in
Thailand at the time of her arrest described her as an ex-wife.

The other woman charged in the case, Tzen Shiung Lee, is in her late
20's, officials said. The two men charged in the case are An-Hui Tso of
Mandaly, Myanmar, who one official said operates a textile factory
there, and Guo Xing Sae Chen of Chiang Mai, Thailand.

Officials from the drug agency said the wholesale value of the heroin
seized was about $7.3 million.

Khun Sa, whose army long dominated the region's heroin trade under the
guise of fighting for self-determination for the insurgent Shan tribal
group, surrendered to government forces in 1996 and has been living
under house arrest in Yangon, officials said.

But the D.E.A. and federal prosecutors contend that he is still a
dominant force in the region, using family members and associates to
control the flow of heroin from the lush Golden Triangle formed by
Myanmar, Thailand and China. In the remote and rugged mountains there,
the opium crop that is later refined into heroin has long been the
staple that finances the daily needs of the fiercely independent hill
tribes.

Myanmar is the world's second-largest source of illicit opium and heroin
after Afghanistan, according to the State Department's 1999
International Narcotics Control Strategy Report. The report, the most
recent available, said that largely due to drought, opium cultivation
and production in Myanmar had declined significantly for the third
consecutive year.