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updated: 7/13/2014 6:13 AM

More precious than gold, heroin, cocaine: Rhino horn

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  • Rhinoceros horn is worth more on Asiaís streets than gold, cocaine or heroin _ a trade that is lucrative and hard to stop. U.S. officials say combating trafficking in rhino horns is key to their effort to dent the $8 billion to $10 billion annual global illicit trade in wildlife. The U.S. considers white rhino, such as these grazing at a private game reserve in Brits, South Africa, in 2012, a threatened species while black rhinos are endangered.

      Rhinoceros horn is worth more on Asiaís streets than gold, cocaine or heroin _ a trade that is lucrative and hard to stop. U.S. officials say combating trafficking in rhino horns is key to their effort to dent the $8 billion to $10 billion annual global illicit trade in wildlife. The U.S. considers white rhino, such as these grazing at a private game reserve in Brits, South Africa, in 2012, a threatened species while black rhinos are endangered.
    Bloomberg News

 
Bloomberg News

The trafficker was pleased. He had already peddled $3 million of his illicit product and stood to make a nice profit on the deal in front of him.

The undercover agent was nervous. It had taken two years of work to reach this point. "This was an international investigation of international significance," agent Tim Santel said. "I didn't want him walking away."

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While the sting in a posh Miami hotel room last year had the mark of a drug probe, the smuggler wasn't buying narcotics, and the agent didn't work for the FBI or DEA. Zhifei Li, 29, an antiques shop owner from China, was after rhinoceros horn, worth more on Asia's streets than gold, cocaine or heroin. And Santel is a 23-year veteran of the U.S. Fish and Wildlife Service.

As the Li case reveals, the rhino horn trade is lucrative and hard to stop. U.S. wildlife and law enforcement officials say combating trafficking in rhino horns is key to their effort to dent the $8 billion to $10 billion annual global illicit trade in wildlife.

"It is threatening the existence of species which have roamed the Earth since prehistoric times," said Tony West, the U.S. Justice Department's associate attorney general. "Couple that with what it does in terms of undermining security, in terms of hindering economic growth, in terms of furthering transnational illegal activity, it has to be a priority."

Trafficking in wildlife wreaks havoc on species and their ecosystems -- whether loggers are stealing exotic woods, divers are catching rare fish or hunters are killing endangered animals for their skins and tusks. West and other U.S. officials say they are also concerned that organized crime and even terrorist groups will join in, because the product is so valuable and the penalties light, compared with those for running drugs or guns.

Rhino horn, composed chiefly of keratin, the same substance as a human fingernail, has seen its value surge in Asian countries such as China and Vietnam where citizens seek them for medicinal purposes. The horns are carved into intricate "libation cups" or ground into powder to be consumed.

As the price in Asia has approached as much as $60,000 per pound, poachers have slaughtered more and more rhinos to meet demand. Last year, 1,004 of the animals in South Africa were killed -- up from six in 2000, according to the U.S. Fish and Wildlife Service and the Justice Department.

There are an estimated 20,405 white rhinos and 5,055 black rhinos across Africa. The U.S. government considers white rhinos threatened and black rhinos endangered.

The poaching of rhinos, if left unchecked, will "virtually wipe them out," Judith Garber, an acting assistant secretary of State, testified before Congress in May.

The surging price has also led smugglers from Africa to the U.S. in search of older horns, usually mounted as trophies. U.S. interstate trade in rhino horn less than 100 years old is banned because authorities believe such deals help spur demand that leads to the killing of more of the animals.

In 2011, a unit of eight agents from the Fish and Wildlife Service and prosecutors from the Justice Department started "Operation Crash," the term for a herd of rhinos, to battle the trade after they noticed a rash of rhino horn thefts from museums and homes in Europe and arrested two Irishmen in Colorado seeking to make a purchase.

Since then, agents have arrested 18 people for trafficking -- a disparate group that includes owners of antique shops, a rodeo cowboy, a nail salon proprietor and a convicted drug dealer.

An early target was a Manhattan antiques dealer who became an informant and then "double-crossed" law enforcement -- he was caught buying horns in sting operations, Justice Department attorneys Richard Udell and Janis Echenberg wrote in court papers. The man was sentenced last year to six months in prison.

Last week, an appraiser of Asian art, a Texas resident who played a key role in Li's trafficking ring, pleaded guilty to smuggling almost $1 million worth of rhino horn and elephant ivory to China.

In almost all cases, the smugglers were buying rhino horn through taxidermy websites, auction houses and through personal contacts in the U.S. and shipping it to China and Vietnam. The U.S. government estimates the 18 smugglers trafficked more than $10 million in rhino horn. Though most didn't know each other, several had something in common: They were working for Li, a former banker from Shandong who opened his antiques shop to cater to China's wealthy elite.

"The money being made in this brings out all sorts of folks," Santel said. "It's the magnet for these types of people; they want to make quick cash. It's nothing more than greed -- they don't care that there is rhino's head half-chopped up."

Santel, a slim 49-year-old who has a graying goatee and wears wraparound sunglasses, called the investigation of Li one of the most complex his agency has undertaken.

In 2011, agents came across an antiques dealer on Long Island who was one of three brokers arranging sales for Li. The purchases were often complicated and involved middlemen necessary to locate difficult-to-find horn and to obscure the transactions.

In one instance, a New Jersey middleman brokered a deal for Li that would involve Missouri, Israeli and Long Island dealers before the horns were shipped to Hong Kong and smuggled into China.

Agents eventually caught the Long Island dealer brokering a sale, and they convinced him to become an informant in the hopes of nabbing the ringleader. In late 2012, Li told the dealer he was going to attend an antiques show in Miami and told him to find him some rhino horn to buy.

The dealer said he had the perfect supplier: a wealthy Illinois businessman, who happened to be Santel.

When Li showed up at the Miami hotel in late January 2013, Santel pulled out two horns from his backpack -- one weighed 5 pounds and the other 2.5 pounds. Li was impressed by the large horn, which he said would be carved into a "simple bowl."

They agreed to a $59,000 price, one that would allow Li to resell the horns in China at a considerable markup. It was clear that Li had no inkling he was about to be arrested; he would later plead guilty to smuggling charges and be sentenced in May to five years in federal prison.

As he was leaving the hotel room with his horns -- the entire transaction captured on videotape -- Li asked Santel if he could get more, "as much as you can find?"

And, the smuggler wondered, "Can you ship directly to Hong Kong?"

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