U.S. OFFICIALS TROUBLED BY EXPANSION OF ASIAN-CANADIAN DRUG GANGS

Canadian-based Asian crime syndicates have become the No. 1
distributors of ecstasy in the United States, according to a new
report released yesterday.

The business of Vietnamese and other Asian gangs, who started out by
growing the popular form of marijuana known as B.C. Bud, has boomed,
according to the U.S. Department of Justice. The agency's national
drug intelligence centre says the groups have diversified their
product lines and set up U.S. franchises, grabbing a significant
share of the multibillion-dollar U.S. drug market.

"Canadian-based Asian DTOs [drug-trafficking organizations] have
recently gained control over most MDMA [ecstasy] distribution in the
United States," states the centre's annual threat assessment,
released yesterday.

It adds that in the United States "an estimated $5.2-billion (U.S.)
to $21.2-billion is generated through the wholesale distribution of
marijuana and MDMA by Canada-based DTOs, and much of the illegal drug
proceeds are transported in bulk" back to Canada.

(The figures were achieved by multiplying the estimates of Canadian-produced
drugs available in the United States by their estimated wholesale value;
comparable estimates arose a few years ago, when Forbes Magazine put the
value of B.C.'s marijuana crop alone at up to $7-billion.)

Figures as high as this would suggest that Canada's illegal drug
business with the United States could rival the overall value of
Canada's legitimate exports, such as wheat ($2.7-billion Canadian) or
even lumber and sawmill products ($18.9-billion). Yet one
statistician who examined the U.S. study said comparisons should be
made cautiously.

"Using the $20-billion figure is an overstatement . . . it's way, way
too high," said Philip Cross, an analyst at Statistics Canada. While
the government agency doesn't track illegal drug activity, he looked
at the U.S. study's methodology, and said that lower ranges of the
estimate are far more likely.

Whatever the dollar amount, the drug business would appear to be as
brisk as ever. Mexican drug networks remain, by far, the biggest
problem in the United States. But Canadian gangs are also carving out
territory in their niches.

Since marijuana grow-operations began spreading eastward from British
Columbia in the late 1990s, Canadian police have warned the activity
would lead to increasingly entrenched criminal networks dealing not
just in pot, but also in chemical drugs, like
methylenedioxy-methylampheta-mine (MDMA), the club-drug known as ecstasy.

The United States says it is now picking up precisely this sort of
activity. South of the border, police say they dismantled
Israeli-based organizations importing the club drugs, only to see
Asian gangs from Canada fill the vacuum. The problem, as stated in
the threat assessment released yesterday, is that the new gangs
appear stronger and more impenetrable, largely because of the
difficulty in gaining informants in tightly knit ethnically homogeneous groups.

Syndicates still ship synthetic drugs such as ecstasy from overseas,
but increasingly they produce them on the continent. "Canada-based
Asian criminal groups most often smuggle the drug into the United
States via private and commercial vehicles over the Canada-U.S.
border," the report says. "Almost all of the MDMA smuggled into the
United States from Canada is produced in Canada."

Ecstasy may be a growth industry, but these gangs have never
abandoned their core product. "High-potency marijuana production,
smuggling and distribution by Canada-based Asian DTOs, primarily of
Vietnamese ethnicity, is increasing," the report says.