THIRTY PREGNANT COWS AND A COLOMBIAN DRUG TRAFFICKER'S WIFE

Government Says He Helped Launder Cruz's Drug Money

Land Broker Takes Stand In Own Defense

Earl Frith told the jury that he agreed to accept the $40,000 in drug money
because he feared for his life.

Thirty pregnant cows and a Colombian drug trafficker's wife are what
connect Floyd County real estate broker Earl Frith to an international
cocaine-smuggling case under way in Roanoke federal court.

Frith, 63, took the stand in his money-laundering trial on Wednesday. He
explained to the jury that he agreed to accept drug money because he feared
for his life. The defense rested Wednesday, and closing arguments will be
heard this morning.

After Javier and Pamela Cruz were arrested for drug trafficking in April
1991, they both agreed to cooperate with authorities. Pamela Cruz -- whose
arrest was not widely known -- agreed to go into Frith's office, offer him
drug money and tape the real estate transaction.

Wearing a wire, Pamela Cruz went to Frith's business, Roanoke Land and
Auction, twice in May 1991, claiming to want to buy a new house. Frith
testified he had heard that Javier Cruz had been arrested on murder and
drug charges and was "scared to death" when she showed up at his office.

"I was telling that gal whatever she wanted to hear," Frith testified. "It
was obvious to me she was not on a real estate mission. I didn't know if he
[Javier Cruz] thought I'd seen something I shouldn't have seen. I figured
she was there trying to assess whether I was a threat to them. That's what
I assumed."

The IRS sent Pamela Cruz into Frith's office after becoming suspicious of
the real estate broker when he made two bank deposits of $8,000 on the same
day in 1989 after a business transaction with Javier Cruz.

The Cruzes had been posing as dairy farmers in Floyd County when they first
moved to Virginia in 1989, and Frith sold them 30 pregnant Holsteins for
$16,000 in cash. Frith also sold them their house and farm.

During the second meeting with Pamela Cruz, she gave him $40,000 that she
told him came from her husband's drug customers. She asked him to help her
buy a house in a way that would obscure the large cash transaction from the
bank, so it wouldn't be reported to the government.

After she gave him the money, Frith told her: "You know, I don't even know
what the damn law is on my side. ... I know that that's something that they
would give me a hard time about, you know, if they knew that I had some
concept of the source. But there's no reason for me to know that."

Frith testified that he merely tried to appease Pamela Cruz and get her out
of his office. If she thought he could provide evidence against her, Frith
said, he feared that drug traffickers connected to her husband could come
after him. He said he began sleeping with a loaded gun under his bed.

"With the information I had at the time, I really don't know a better way
to handle it," he said. "I had no dream it was my own government setting me
up."

As soon as Pamela Cruz left Frith's office after dropping off the money,
federal agents came in and seized it, along with real estate records
pertaining to the Cruzes. Frith is charged with money laundering for taking
the $40,000.

Assistant U.S. Attorney Joe Mott suggested that if Frith had really been
scared of the couple, he would have told agents in his office that he
feared for his life.

Also on the tape, Frith says, "I know before when you, he [Javier Cruz] was
handling the cash, I always ... took less than $10,000 at a time and wrote
receipts for it and documented my records. If they come here, there's not a
d--- thing they can do ..."

Frith is charged with structuring the two $8,000 deposits after he sold the
cows to keep the bank from filing IRS reports on the money. Banks must
report all cash deposits of more than $10,000, a law designed to keep track
of illegal activities that generate large amounts of currency. Purposely
structuring deposits to hide transactions over $10,000 is a crime.

Chuck Morley, a former IRS agent and investigator who trains law
enforcement agencies on money laundering, testified on Frith's behalf. He
said banks, law enforcement agencies and private citizens all show
confusion over the law and what kind of transactions constitute structuring.

He said he also is troubled by some of the undercover operations federal
agents conduct to catch people structuring and laundering money.

"We have traffickers ... running all over the place," Morley said, "and
agents are setting people like Mr. Frith up."