Panama has been a kind of vast way station in the coke trade, a refueling or transfer stop for traffickers coming from the Colombian cities of Buenaventura or Cartagena, say sources with knowledge of the Rayo case. From Panama, the drugs allegedly handled by Rayo's people were sent by boat and truck to Mexico, where they were delivered to the Sinaloa Cartel, the Mexican outfit that controls smuggling along the central and western parts of Mexico's border with the United States.
It's a misconception that drugs are moved "underground," says a source familiar with the Rayo case. "The drugs don't go underground. If [traffickers] are driving on the ground, it means they control the ground. If they are going by sea, it means they control the sea."
Along the lengthy route as coke makes its way north, bumping over roads and waterways, there are watchful eyes that must be controlled by threats of retaliation or handsome rewards. As the South American drug cartels rose to prominence in the 1980s, they began to bribe and threaten Colombian cops and judges. So the United States learned to check their power from the top down, using foreign aid to buy the loyalty of the Colombian government; since 2000, the U.S. has allocated about $5 billion to Colombia, hoping, among other things, to smooth the way to extradite Colombian drug suspects to the U.S. Rayo is "a multi-multi-millionaire," says a source familiar with his case. "He can buy any judge in Colombia. But he can't buy a federal judge in America."
By the early 2000s, Rayo had had a number of close calls. Drug shipments were seized and associates were arrested and extradited despite having the same advantages in Panama as Rayo. In 2003, Rayo moved again, to São Paulo. There, he opened his wallet and made new friends, buying diamonds and rare antiques, investing in a casino, and collecting artwork that he exhibited in his private gallery. He also made a hobby of racehorses, buying six of them including his namesake, Rayo (Spanish for lightning), which just raced in December at Gulfstream Park.
Then international investigators got a break. A Nautipesca employee was arrested in Panama. The man already had a long rap sheet and was facing a prison term, says Samuel Logan, an independent journalist who pursued the matter with his DEA sources. Police squeezed the Nautipesca employee to get to Rayo, Logan says. "Panamanian police flipped this guy."
Police in Panama, Colombia, and Brazil monitored the phone calls of Rayo and his associates, then turned their findings over to U.S. law enforcement agencies. Those agencies also conducted their own surveillance in South Florida, where several of Rayo's associates lived, and they built a federal case against him.
The portrait of Rayo that emerged was of "a businessman, not a thug," says Logan, whose sources gave him an inside view of the investigation.
It would seem peculiar, for instance, that Rayo's network transported drugs for each part of Colombia's drug-production triumvirate: the FARC, the AUC, and the Norte del Valle Cartel, which is based in Buenaventura. Those groups are bitter enemies that regularly kill one another's soldiers in a constant battle to control key ports and mountain passes. But each of the groups has a history of violence and bribery, which saves Rayo's organization from having to perform those tasks themselves in Colombia. They may hate one another, but they could at least agree that it helped to have someone around like Rayo, whose organization allegedly moved drugs north and reliably returned laundered money south, offering the convenience of one-stop shopping. For the drug producers, Rayo's organization, Logan says, was "like UPS."
Jose Arango Jaramillo sounded nervous. It was April 2006. The 42-year-old Colombian, who had been living in Coconut Grove, had recently sold a four-bedroom, 10,000-square-foot house on Justison Court, near Ingraham Highway in south Miami. He'd bought the house with drug money, proceeds from a shipment that came through Pablo Rayo's network. It sold for $2.6 million, according to the Miami-Dade County appraiser.
Next, Arango was supposed to get on a jet for Brazil and give his boss the cash.
But Brazilian police were listening to Arango, federal prosecutor Andrea Hoffman would reveal months later in a Miami courtroom.
"Arango declined to travel, telling Rayo he was afraid he was under law enforcement surveillance," Hoffman explained — summarizing what Brazilian police learned from that surveillance.