Pubdate: Fri, 04 Jun 2004
Source: National Post (Canada)
Copyright: 2004 Southam Inc.
Contact:  http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Drew Benson, Associated Press

ALLEGED DRUG LORD CHALLENGES U.S. TO PROSECUTE HIM

Assets Frozen: Peruvian Businessman Says Rivals Are Trying To Ruin His
Name

LIMA - One of Peru's top businessmen has challenged the United States to 
start legal proceedings against him in U.S. courts after the White House 
placed him on its list of overseas drug kingpins.

"I'm sending a letter to the President of the United States asking that 
they open a trial in the United States so that I can present my case and 
the American justice system can decide if I am guilty or innocent," said 
Fernando Zevallos, founder of Aero Continente, Peru's largest airline, who 
also faces legal proceedings in Peruvian courts.

Mr. Zevallos, 46, has been the subject of more than 30 U.S. Drug 
Enforcement Administration (DEA) investigations, but has never been 
convicted of a crime. He denies any wrongdoing.

He lived as a legal permanent U.S. resident in Florida for a decade before 
returning to Peru in 2001 to face drug trafficking charges, for which he 
was acquitted.

On Tuesday, the U.S. government announced it had placed him on its list of 
overseas drug kingpins and frozen the U.S. assets of Aero Continente and 
several related companies.

The White House announcement came hours after a Lima court began retrying 
Mr. Zevallos on cocaine trafficking charges.

The airline mogul says he is the victim of character assassination by 
convicted drug dealers turned prison informers, corrupt police, overzealous 
U.S. drug agents and business rivals.

Under the 1999 Drug Kingpin Act, people placed on the U.S. list of drug 
traffickers and their related businesses are denied access to the U.S. 
financial system and any transactions involving U.S. companies and individuals.

That could cripple the Peruvian airline since it means U.S. companies that 
sell Boeing airplane parts are now banned from providing them to Aero 
Continente to maintain its jets.

In April, the U.S. Federal Aviation Administration banned the airline from 
flying to the United States after it discovered a pattern of safety 
violations, including the use of unauthorized motor parts and falsified 
maintenance records, a U.S. official said.

As part of the kingpin program, the U.S. Treasury Department has frozen 
U.S. assets belonging to Mr. Zevallos, five other people and seven 
companies linked to him, including Aero Continente.

"The U.S. government has reason to believe that the six individuals and 
seven entities ... either assist in or provide financial or technological 
support for or to the international narcotics trafficking activities of 
Fernando Zevallos," said a U.S. embassy spokesman in Lima.

Mr. Zevallos is the most prominent and powerful of a dozen defendants 
facing charges over the 1995 seizure of 3.3 tonnes of cocaine in the 
northern Peruvian city of Piura that broke up the Nortenos drug gang.

He moved to the United States after the 1995 bust and immediately 
transferred his ownership of Aero Continente to relatives.

The airline mogul returned to Peru in 2001 to face charges of complicity 
with cocaine traffickers from the Nortenos gang and was acquitted in 2002.

A year later, Peru's Supreme Court annulled the acquittal and ordered a 
retrial, which began in September, 2003. In January, the case was thrown 
out on a technicality by a lower court, which then ordered the new retrial.

Mr. Zevallos is charged with "aggravated illicit drug trafficking." The 
original 1997 indictment alleged he "systematically" used Aero Continente 
to launder US$43.5-million of cocaine money to buy a fleet of 12 jets in 
1992-95.

The key witness is convicted Nortenos drug boss Jorge Lopez Paredes, who 
claims he gave Mr. Zevallos US$1.5-million in 1991 to buy a Boeing 727 
cargo jet to ship cocaine to Guadalajara, Mexico.

Peruvian investigators and the DEA believe the cocaine seized in Piura in 
1995 was about half of a seven-tonne shipment destined for Mexico and the 
United States, according to an internal U.S. law enforcement memo.

In recent months, Mr. Zevallos has launched several lawsuits against 
authors, journalists and U.S. diplomats he says have smeared his name.

The businessman started a small-plane air taxi service in Peru's Amazon 
jungle in 1980 and founded Aero Continente 12 years later. Its fleet 
includes two dozen planes, with about 40 domestic and international flights 
each day.
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MAP posted-by: Keith Brilhart