PILLS OF PROFIT

Ecstasy Made Mark In Houston Through Netherlands

Shaped like clovers, festooned with Playboy bunnies and popular cars, the
colorful little Ecstasy pills that landed the owners of two popular
downtown clubs in jail last week started their march to Houston in
clandestine, rural laboratories in the Netherlands.

Chemists, sometimes working out of large, sophisticated buildings,
sometimes mobile laboratories, have churned out as many as 500,000 Ecstasy
pills an hour for a mere 20 cents each, making the Netherlands, a country
known for its liberal attitude toward the illegal pursuit of happiness, one
of the major worldwide producers of Ecstasy.

Last week's charges against 24 people in Houston and 10 others broke up
what federal authorities described as the world's largest
Ecstasy-trafficking ring. Arrests ranged from Israel, where police say an
organized crime group masterminded the smuggling, to the production
headquarters in the Netherlands, to Spain, where sources say Houstonian
Sarabjeet "Rick" Singh was expanding the Ecstasy ring into that country's
vibrant club scene.

Singh, who remains at large in Spain, and his brother Amrik "Spiro" Singh
are also charged with opening the clubs Spy Club and The Hub to launder
drug profits, an estimated $7 million.

Ecstasy, a stimulant and mild hallucinogen, is mostly sold to teenagers and
young adults at dance clubs, high schools and colleges across the United
States. Ecstasy users dance for hours, mesmerized by the pulsing beat and
flashing lights of the techno clubs where it is often consumed. The pills
were not sold at Spy Club and The Hub, authorities say, but instead snaked
through a chain of dealers in Houston and other U.S. cities before being
sold to consumers for about $20 per tablet. In fact, Spy was known for its
intolerance of illegal drug sales, two people familiar with the downtown
club scene said.

The clubs remain open under a federal protective order.

Most of the Ecstasy in the United States is brought by Israelis and
Russians, according to a National Drug Intelligence Center report on
Ecstasy. Many of the traffickers are Russian-born immigrants to Israel or
the United States, and are typically young and well-educated, the report says.

Ecstasy is typically made in the Netherlands and Belgium. The drug is
illegal in both countries, even though the Netherlands is known for an
over-the-counter drug culture in which marijuana and hashish can be
purchased at "coffee shops."

Air, sea and rail connections from the Netherlands and Belgium to the rest
of Europe and the United States make them convenient sites for drug
trafficking.

Ecstasy tablets have been smuggled into the United States as many as
300,000 at a time in gas tanks of imported BMWs, boxes of blue jeans
shipped as cargo and sewn into the clothes smugglers were wearing. An
81-year-old woman in a wheelchair, a couple traveling with a handicapped
teenage son, and a group of Hasidic Jews all have been caught smuggling
Ecstasy.

Drug traffickers also use false bottoms in suitcases, swallow thousands of
tablets in condoms and send Ecstasy through the mail and courier services.

"It's up to the smugglers' imagination," said Dean Boyd, a spokesman for
the U.S. Customs Service.

Ecstasy is relatively easy to smuggle because of its compact size. Drug
dogs have been trained only in the last few years to identify its sweet
smell, Boyd said.

Once the pills are in the country, they are sold to wholesalers in
quantities of hundreds of thousands, to midlevel dealers in amounts of
about 1,000 at a time and then to the retail dealers who hawk dozens or
hundreds of the pills directly to users.

Authorities say Gal Kofferberg of Houston sold vast quantities of Ecstasy
to the Singh brothers, who led the Houston-based portion of the drug ring.

Kofferberg, Spiro Singh and a third brother, Amarjit Singh, were arrested
in Houston on Tuesday.

Rick Singh is wanted in Spain, where a knowledgeable law enforcement source
said he had been living for at least several months while expanding the
Ecstasy ring.

Defendants in the Ecstasy ring also were arrested in Miami and Los Angeles,
which also have active drug and club scenes.

Spy Club, 112 Travis, and The Hub, 312 Main, are both sleek nightspots
geared toward 20-something crowds. Authorities say both businesses were
bought with drug money, but they would not say whether the Singhs continued
to flush dirty money through the clubs after they were open.

Spy employees often would show up at private parties with extra liquor to
give away, said one person familiar with the downtown club scene.

"I've been wondering how Spy has stayed alive for years because it doesn't
have the crowd, it's not making money," the person said.

Mike Snow, a disc jockey at Spy for five years, said Spy has four busy
nights, while most downtown clubs have only one.

"Spy has legitimately been making the money," Snow said.

Spy, an 18-and-older dance club, and The Hub, a bar, remain open, but their
profits are frozen until the case goes to trial. If the Singhs are
convicted, the money and the clubs will be seized by the federal
government. If not, they will be returned.

The Singh brothers frequented Spy on weekends. People who know them through
the club scene described Spiro Singh as laid back and Rick Singh as more of
a "hothead."

Rick Singh traveled with bodyguards and "real fast-looking, trendy girls,"
those people said. Both drove expensive cars. Rick Singh put down $20,000,
including $7,000 cash, for his $96,000 Jaguar, the indictment against him says.

Three Singh family houses far from the flashy downtown club scene, both in
style and distance, are also subject to government seizure.

The federal government could seize $7 million in property, the amount
authorities believe the Singhs made from the drug business, U.S. Attorney
Michael Shelby said.

Their houses are sheltered deep in the winding, quiet streets of suburban
northwestern Houston, near West Road and Beltway 8. Two of the three have
manicured lawns, with children's bikes at one and a miniature basketball
hoop at the other. Both Indian families have posted "Proud to Be an
American" signs in the yards and American flags on the pragmatic -- and
low-profile -- Toyota Camrys and Honda Accord in the driveways.

The third house, in the same area, had a "For Sale" sign out front two days
after the arrests, and neighbors said it had been vacant for months.

Residents in suburban neighborhoods around Houston also are familiar with
the drug. With its relatively low price tag and harmless image -- contested
by authorities -- Ecstasy is popular among the teenagers who live in
conventional communities like the Singhs'.