Pubdate: Thu, 27 May 1999
Source: Houston Chronicle (TX)
Copyright: 1999 Houston Chronicle
Contact:  http://www.chron.com/
Forum: http://www.chron.com/content/hcitalk/index.html
Author: Jenalia Moreno, Houston Chronicle, Knight Ridder/Tribune Business News

DRUG SHIP AUCTION IN TEXAS DRAWS BIDDERS WORLDWIDE

May 27--ORANGE, Texas--Looking for a good deal on a used cargo ship? One
generally considered to be a great fixer-upper?

Look no further. Beginning at 11 a.m. Friday at the CBH dockyard, you can
put your bid in for the M/V Cannes, seized Jan. 13 by the U.S. Coast Guard
in the Port of Houston.

Authorities found nearly 10,000 pounds of cocaine buried five feet below
iron ore pellets piled inside one of the ship's cavernous hulls, making it
the Coast Guard's largest drug seizure ever in Texas.

To generate revenues for the federal government's drug-fighting efforts,
the U.S. Customs Service is auctioning the ship off, with bidding starting
at $1.2 million.

But don't be late.

So far, as many as 40 ship agents from as far away as Pakistan, Greece,
Singapore, Finland and Germany have carefully inspected the vessel, which
is rusty, but in good condition overall.

"A guy from Hamburg was here," said James Foland, district manager for
Fairfax, Va.-based EG&G Services, which has been hired to auction the
26-year-old vessel. "A guy from Singapore called up last week. He didn't
even know if he was in Texas or not."

Ship owners and agents from around the world are interested in the bargain
price of this Panamanian-flagged bulk freighter. The previous owner, Quest
Ocean Ltd. of Piraeus, Greece, did not respond when contacted by government
officials and lost ownership of the Cannes.

"We hope to get more than that," said Paul Rimmer, Customs port director
for Houston and Galveston.

At worst, a scrap dealer could pay $700,000 for the vessel, which was
seized in Houston after the Coast Guard boarded it on the high seas 125
miles southwest of Jamaica.

Five of the ship's 24-person crew were indicted on federal drug-trafficking
charges. They could receive 10 years to life, and one crew member who
allegedly was an accessory to the crime could receive up to 15 years in
prison.

At 580 feet long, the Cannes is the largest vessel seized by Customs since
1990. The last freighter Customs seized nearly 20 years ago, the Bor,
fetched $1.3 million.

Typical auction fare for EG&G, which auctions merchandise and property
seized by several other government agencies including the Internal Revenue
Services and the U.S. Secret Service, includes computers, clothing and cars.

But the company, which has an office in Houston, also has sold everything
from gravestones to horses.

The company once auctioned a DC 9 airplane for $3.6 million and a Beverly
Hills home seen in the film Beverly Hills Cop II for $1.8 million.

These auctions provide the U.S. Treasury Fund a net profit of $12 million
to $20 million annually. The fund provides money for crime fighting and
victims assistance.

Rimmer said that the fund will receive 60 to 70 percent of the ship's sale
price and the remaining money will go to repaying the $125,000 owed to crew
members who were sent back to their homelands. The remaining money also
pays for fuel and storage, which cost $17,000 in Orange over the last few
months, compared with the $6,840 in charges accrued during the vessel's
week-long stay in Houston after the iron ore and drugs were unloaded.

So, after four months of investigations by three federal agencies, the
seizure will culminate Friday with the slam of an auctioneer's gavel.

EG&G expects that 10 minutes into the auction, the Cannes will have a new
owner.

"It's fast and furious," said Kerry Cooper, EG&G Services' public relations
coordinator.
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