FEDS BUST UP ECSTASY RING

Say Clubs Laundered Money

Federal authorities have dismantled a Houston Ecstasy-trafficking ring
that used two popular downtown nightclubs to launder profits and was
supplied by an international network considered among the largest in the
world, officials said Tuesday.

Authorities have charged 24 people in Houston and 10 members of the
international organization -- most in Israel, the base of the operation, and
in the Netherlands, where the Ecstasy was produced.

Among those charged in Houston are two brothers, Sarabjeet "Rick" Singh and
Amrik "Spiro" Singh, who authorities said oversaw a local network that
distributed massive amounts of Ecstasy and opened the Spy Club and The Hub
to launder profits.

The Singh brothers are charged with money laundering and accused of
supervising an operation that has generated more than $11 million since
January 1997.

Federal authorities have moved to seize the profits and the Singhs' three
local homes, luxury vehicles and bank accounts. The Hub, 312 Main, and Spy
Club, 112 Travis, will continue to operate, though all profits will be
frozen.

Spiro Singh was arrested Tuesday in Houston. Rick Singh remains at large in
Spain.

The distribution cell the Singhs are accused of operating had at least 19
members, officials said, including another owner of The Hub, Harmohind
"Mickey" Grewal, who is charged with money laundering and conspiring to
distribute Ecstasy. The members face various charges, including possession
with the intent to distribute Ecstasy and illegal use of telephones in
connection with distribution.

Also arrested was the Houston liaison for the international network, Gal
Kofferberg, who is accused of importing Ecstasy to be distributed by the
Singhs, and transferring laundered profits overseas, officials said.

"This was a well-organized, well-planned drug trafficking organization that
was engaged in the distribution of tremendous amounts of Ecstasy here in
Houston," said U.S. Attorney Michael Shelby. "We have disrupted the Houston
cell, but we have also penetrated the most significant Ecstasy operation in
the world today."

The arrests are the culmination of a three-year investigation that included
law enforcement agencies in seven countries and targeted the Singh cell, the
largest distributor of Ecstasy in Houston, federal authorities said.

Ecstasy, a club drug often consumed at raves, has become the third
most-popular drug in the Houston area, said Maj. George Sturgis of the
Harris County Sheriff's Department. Cocaine and marijuana are the most used.

"This is not a harmless drug," Shelby said. "It is a growing problem that
has grown exponentially in the past three years."

A noted difficulty in curbing Ecstasy distribution is that most of it is
manufactured and smuggled from Europe, unlike such drugs as marijuana and
cocaine, which primarily come from South America and Central America, Shelby
said.

"This is an entirely different enterprise, with different routes and
different methods," Shelby said. "There is a rapid turnover in supply and
tremendous profit."

Six members of the Israeli group also have been charged with conspiring to
export Ecstasy from Europe to the United States. The ring would purchase
large amounts of Ecstasy in the Netherlands and organize couriers to smuggle
it into the United States, including Houston, officials said. Once in
Houston, the Ecstasy was funneled to Kofferberg, who would distribute it to
the Singhs, federal authorities said.

Shelby said the United States will seek the extradition of the international
suspects, whom he would like to prosecute in Houston.