UNDERCOVER COP GETS EYEFUL AT AMERICAN HOTEL

An undercover Vancouver police officer sitting inside the American Hotel on
Main Street, near the Main Street SkyTrain station, said he watched stolen
goods sold openly at a table of a dozen people.

The officer's report was part of a three-month probe into drug dealing and
other illegal activity at hotels, pawn shops and grocery stores in the
Downtown Eastside. The probe included the American, which despite being the
subject of previous drug busts, continues to operate as a business.

"I cannot emphasize how much stolen property is sold inside this
establishment," the officer wrote in a report, parts of which were released
at a police news conference last week.

"This large table of 12 people are here for one reason, and one reason
only-to buy stolen property. The staff is all aware of this and make an
effort to ignore it. Drugs are sold... at an amazing rate. I have observed
15 drug deals take place in 30 minutes. This goes on all day long."

He notes the dealers sit in "up-down" chairs-"up" for cocaine, "down" for
heroin-and use an "employees only" door, which leads downstairs.

The undercover officer's observations were part of many police made during
Project Lucille, which culminated June 23 with the arrest of 29 people on
more than 40 charges. Police targeted the American and several other
hotels, pawn shops, corner stores and one grocery store.

Police forwarded their evidence to the city's legal department, and expect
several of the businesses, including the American, to lose either their
liquor or business licences, or both.

The American has been the target of two other major drug probes since July
2002. But the hotel-which received a 24-hour closure after the recent
bust-continues to operate.

This time, Insp. Bob Rolls said, police expect their evidence will form an
overwhelming case for city staff to shut down the hotel's pub, and possibly
the hotel itself.

"We are going to shut it down, and I don't care-even if they don't accept
this project, that's not the end of it, as far as I'm concerned," said
Rolls, commander for the Downtown Eastside. "Then we'll come up with
another strategy and we'll do it a different way."

The recent probe follows a major two-month investigation conducted by the
department's drug squad in June and July 2002. At the time, police said the
American was home to one of the major distribution centres for cocaine in
the Downtown Eastside.

In Project Prism, police seized 40 rocks of crack cocaine, 40 flaps of
cocaine powder, $10,000 in cash and arrested four males inside the hotel's
pub and three rooms.

A year later, in August, Vancouver RCMP announced the arrests of 12 men,
including an alleged Hells Angels' associate, for alleged drug dealing
connected to the American Hotel.

The two-year probe found that the Hells Angels' associate allegedly ran a
sophisticated drug trafficking operation from the American, renting three
rooms under different names.

Police arrested the suspect as he stepped out of his blue 1997 Mercedes
Benz at the back of the American, according to an application for a search
warrant filed in court.

Despite the series of busts, the hotel's business licence has not been
reviewed by the city. Barb Windsor, the city's deputy chief licensing
inspector, said she didn't receive police reports from the two earlier busts.

Council needs evidence in order to consider revoking a licence, said
Windsor, noting, however, she is expecting to receive documents related to
Project Lucille.

"When I get that evidence and that material... if that is the case, that
there is drug dealing, then we'll be taking action," Windsor said.

It isn't clear why evidence from Project Prism or Project Ecru didn't make
it into Windsor's hands, but Rolls said "we should have dealt with [Project
Prism] a little bit differently at that time, I think."

Insp. Ken Frail, who managed Project Lucille, said shutting down a hotel
and its pub is difficult because many times the owner who is under
investigation has a different name listed on the liquor licence than the
one recorded on the business licence.

Police are recommending the licences be connected, but admit names on the
licences are often difficult to trace back to the actual owner-the root of
the problem.

"The people who are down on the paper for owning it, don't even own it in
the first place, then they put in somebody else's name and then they apply
for a licence," Rolls added. "That ends up just being a killer for us."

For many years, 471139 Ltd. owned the hotel and pub, but was sold in 1999
to GSO137 Ventures Ltd. A message left at the pub Wednesday for the owners
was not returned to the Courier.