DEA BUSTS US-CANADA DRUG RING

WASHINGTON - Authorities on Tuesday disrupted a major supply line for
methamphetamine labs in the Southwest, announcing the arrests of 65 people
for allegedly smuggling from Canada tons of a key chemical used to make the
popular illegal drug.

Federal agents are investigating whether cash from the lucrative
pseudoephedrine trafficking ring was being used to finance terrorism.

In one of the arrests, Alaa Odeh, a Staten Island, N.Y., shop owner, is
accused of laundering hundreds of thousands of dollars through an uncle in
the Middle East who has been arrested by Israeli authorities on suspicion of
being a member of the violent Palestinian group Islamic Jihad, according to
the criminal indictment.

Odeh is suspected of operating a "hawala, " an underground money transfer
network popular in Southeast Asia and the Middle East and believed also to
be used by several terrorist operations, including Osama bin Laden's al
Qaida network, authorities said.

"We're always interested in following the money and seeing where the money
goes," Assistant Attorney General Michael Chertoff, head of the Justice
Department's criminal division, said Tuesday.

In the United States, arrests were made in Detroit, Chicago, Los Angeles,
New York, Cincinnati, Riverside, Calif., and Gulfport, Miss. In Canada,
there were arrests in Montreal, Quebec, Vancouver and Ottawa.

The 18-month investigation, dubbed Operation Northern Star, reached to the
top of the trafficking scheme. Among those charged Tuesday in multiple
indictments are six top executives from three Canadian chemical companies:
G.C. Medical Products, Formulex and Frega Inc.

In indictments unsealed in the Eastern District of Michigan, the executives
and several of the ring's brokers were charged with conspiracy to distribute
a listed chemical knowing it will be used to manufacture a controlled
substance.

The companies sent truckloads of pseudoephedrine into the United States from
Canada, most of them crossing the Ambassador Bridge in Detroit before
heading to Chicago, then southwest to rural drug labs surrounding Los
Angeles and Las Vegas. The crates of illicit tablets sometimes were
camouflaged in legal shipments of bottled water or bubble gum.

The profits were substantial. One box of 80,000 pseudoephedrine tablets,
worth about $900, can be used to produce $100,000 worth of methamphetamine.

In addition to being the primary ingredient in meth, pseudoephedrine is
commonly found in over-the-counter sinus medications. As the production and
use of meth began to increase, lawmakers in the United States regulated
pseudoephedrine, listing it as an illegal substance in certain
circumstances. The Drug Enforcement Administration then cracked down on
domestic pseudoephedrine production.

As U.S. suppliers were arrested, DEA investigators noticed that Canadian
shipments were being imported to fill the void. Canada has since begun to
place controls on the chemical similar to the ones the United States has in
place. Operation Northern Star was conducted with the help of the Royal
Canadian Mounted Police.

"Without a steady supply of pseudoephedrine, it's a lot harder to make meth
and you can't sell what you can't make," DEA Chief of Operations Roger
Guevara said.