A container ship financed by JPMorgan was seized by US customs officials this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion on the vessel.
The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the ship. The two reportedly structured the purchase so the ship was owned by client assets in a transportation strategy fund run for JPMorgan’s asset-management arm. The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe because of its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UN Office on Drugs and Crime said. Upon application from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the United States District Court for the Eastern District of Pennsylvania issued a seizure warrant for the vessel.
On Thursday, July 4, CBP executed the warrant and seized the MSC Gayane. CBP has various seizure and forfeiture authorities under Title 19 of the United States Code (USC).
“The MSC Gayane is the largest vessel seized in U.S. Customs and Border Protection’s 230-year history and follows the record seizure of almost 20-tons of cocaine discovered on the vessel,” said Casey Durst, CBP’s Director of Field Operations in Baltimore. “Seizing a vessel of this size is an unusual enforcement action for CBP, but is indicative of the serious consequences associated with an alleged conspiracy by crewmembers and others to smuggle a record load of dangerous drugs through the United States. This action serves as a reminder for all shipping lines and vessel masters of their responsibilities under U.S. and international law to implement and enforce stringent security measures to prevent smuggling attempts such as this.”
“A seizure of a vessel this massive is complicated and unprecedented – but it is appropriate because the circumstances here are also unprecedented. We found nearly 20 tons of cocaine hidden on this ship,” said U.S. Attorney McSwain. “When a vessel brings such an outrageous amount of deadly drugs into Philadelphia waters, my Office and our agency partners will pursue the most severe consequences possible against all involved parties in order to protect our district – and our country.”
“The seizure of the MSC Gayane is another significant step toward holding accountable those who perpetuate drug smuggling crimes both here in Philadelphia and around the world,” said Marlon Miller, Special Agent in Charge of HSI Philadelphia. “HSI, in collaboration with CBP, the Coast Guard, and our state and local law enforcement partners continue to aggressively work with the U.S. Attorney’s Office for the Eastern District of Pennsylvania to comprehensively investigate this case and bring to justice those who had roles in this drug smuggling venture.”