U.S. AND CANADA ARREST 67 IN METHAMPHETAMINE BUST

WASHINGTON -- U.S. and Canadian officials said Tuesday they had disrupted a
major methamphetamine supply system, netting 67 arrests and tons of illegal
chemicals.

The 18-month investigation, dubbed "Operation North Star," centered on the
shipment of pseudoephedrine -- a common nasal decongestant that in large
amounts is a key ingredient in methamphetamine -- from three Canadian
companies to large illicit labs in the Southwestern U.S.

The charges were brought in indictments unsealed Tuesday in New York, Los
Angeles and Chicago, as well as cases brought in Canada. Among those
charged are six current or former executives with three Canadian companies
- -- Frega Inc., Formulex and GC Medical Products -- who allegedly diverted
thousands of pounds of pseudoephedrine to the U.S. for illegal use.

"Without a steady supply of pseudoephedrine, it's a lot harder to make
methamphetamine," said Roger Guevara, DEA chief of operations.

Most of the shipments were made by truck over the Ambassador Bridge in
Detroit, often hidden within legitimate loads of bottled water, bubble gum
and other goods. The main brokers were in Chicago, Cincinnati, Detroit and
Los Angeles, officials said.

Charges were also brought against operators of illicit labs, many in areas
around Las Vegas, Phoenix and Los Angeles, as well as transporters and
distributors of pseudoephedrine. Search warrants executed Tuesday resulted
in the seizure of more than 34,000 pounds of pseudoephedrine, $3.6 million
in cash and six homes, officials said.

The investigation grew out of an earlier probe called "Mountain Express"
that mainly targeted the domestic illegal use of pseudoephedrine. In
January 2002, more than 100 people were arrested in an earlier
investigation of Canadian suppliers.

Authorities were hesitant to make any connection between the drug
operations and terrorism, despite the use by the alleged money launderers
of the "hawallah" transfer schemes frequently favored by financiers of
terror networks such as al Qaeda. These transfer schemes are run outside
normal bank and financial channels, escaping government oversight.

Many of the alleged brokers, money launderers and go-betweens were of
Middle Eastern origin, including one New York man -- grocery store owner
Alaa Odeh -- whose uncle was recently arrested in Israel's West Bank on
charges of being a member of the Islamic Jihad terrorist group. Much of the
money was funneled to Amman, Jordan, and the West Bank cities of Nablus and
Ramallah.

Assistant Attorney General Michael Chertoff, head of the Justice
Department's criminal division, said no charges directly involved terrorism
but the investigation into the money trail would continue.

"We're always interested in following the money and seeing where the money
goes," Mr. Chertoff said at a news conference at Drug Enforcement
Administration headquarters.

The indictment filed in New York federal court cites an intercepted
conversation between Mr. Odeh and another person, in which Mr. Odeh says
that his "Uncle Tayel" was arrested as part of the Islamic Jihad group.
Elsewhere in the documents, that person is identified as Tail Uda, one of
those helping launder the methamphetamine money in the West Bank.