A Slovenian drug family is on the run from federal authorities and now a $5 million reward is being offered for each of their captures.
Authorities say the investigation started more than 10 years ago before the Dark Web and still, this family had more than 200 sites advertising and selling illegal steroids.
“What we quickly found out when we took on the case was that literally millions of dosages of anabolic steroids were being shipped into the United States, including Massachusetts,” said Andrew Lelling, U.S. Attorney for Mass.
“What we realized was that he was probably one of the largest steroid traffickers in the world and was making tens of millions of dollars from this trade,” said Lelling.
Lelling says these fugitives were caught but evaded European law enforcement officials and are believed to be in Slovenia.
“People need to, one, be careful what they’re buying online. Two, be careful what your kids are buying on the internet. So we shut this guy down, right now he’s a fugitive but we don’t think he’s active. But there’s ten people to replace him,” said Lelling.
The Karners allegedly hid all the cash they have earned using corporate shell accounts and payment methods, including Western Union/MoneyGram.
Below is a full rush transcript of the press conference by Kevin Scully, Regional Director of the Drug Enforcement Administration and Andrew Lelling, U.S. Attorney for the District of Massachusetts Narcotics Reward Program.
Mr. Lelling: I’m the United States Attorney in the District of Massachusetts in the United States, which means that essentially I’m a prosecutor with the U.S. Justice Department.
We’re here today to publicize the fact that these three targets, the Karners — Mihael, Lenka and Matevz — have been added to the U.S. Department of State’s Narcotics Reward Program, meaning that the U.S. government will pay up to $5 million for information leading to the arrest of one or more of these targets.
As some of you know already, this investigation and prosecution out of the United States has been going on for many years. It was really a model of coordination, both within the U.S. government, meaning differing agencies; and between the U.S. government and Central and Eastern European governments. We’ve been looking at the Karners since the early 2000’s when at the request of European authorities we began to look into the Karners’ activities which essentially involved using dozens of web sites to sell steroid dosage units by the millions into the United States and other countries. The money made from this activity was laundered through corporate shells worldwide, eventually making its way back to the Karners who are Slovenian nationals.
This kind of investigation requires extensive cooperation among governments which happened here. The Karners were charged by U.S. authorities in 2010. Mihael Karner and his wife were arrested by Austrian authorities I believe in 2011 or 2012 but ultimately released on bail after which the Karners became fugitives, returning to their native Slovenia. They have been there ever since.
In the interim, U.S. authorities have looked into seizing assets of the Karners. There’s been some success there, some not. And at this point we feel that a public reward is a prudent step because we’ve taken most other available steps. We need the public, the European public, to help us collect information that might lead to the arrest of these three people. Often tips from the public are the best way to gather intel on the location and activities of the people we’re trying to find.
We appreciate you all joining us today, and of course I appreciate the continuing cooperation of foreign authorities and also especially the DEA in Europe and here.
With that, I’ll hand it off to Kevin Scully who is the Regional Director for DEA in Europe.
Mr. Scully: It’s a privilege to be here in Belgium representing the United States Drug Enforcement Administration. DEA has a tremendous global presence with approximately 90 offices in 70 countries. Here in Europe we currently have 15 offices where we work closely with our host country counterparts, and recently the United States Congress approved DEA to open a 16th European office in Kyiv, Ukraine, which we’ll be doing in the next year.
Since our inception in the early 1970s, DEA has enjoyed bilateral and multilateral relationships with many European law enforcement counterparts in the region. DEA’s priority is the safety and security of American citizens and the citizens of our partner nations. Together we target the transnational criminal organizations that threaten our countries and the rule of law. The Karners are one example of those organizations impacting both the United States and Europe with their international steroid distribution network and their drug money laundering organization.
DEA realizes that we are stronger when we work together with other agencies, both domestically and internationally. This investigation spanned multiple DEA offices including DEA in Boston, the Special Operations Division, as well as multiple foreign offices that DEA has in Vienna, Rome, Zagreb and Bangkok. In addition, DEA has worked extensively with the United States Attorney’s Office in the District of Massachusetts, the United States Department of Treasury’s Office of Foreign Assets Control, and our European partners in gathering evidence against this organization which has resulted in multiple U.S. indictments.
Now with the assistance of the United States Department of State Interagency Narcotic Rewards Program, we have a bounty of $5 million per individual being offered for information leading to their arrest. With the public’s assistance we can bring these individuals to justice.
Again, thank you for being on the call today and we look forward to answering any questions you may have.
Question: I hear that a lot of people in Slovenia, at least in [Brianna] I think, know where the designated persons live and then probably Slovenian police have the same information. So do you cooperate with Slovenian police on that? And if you do, why there has been no arrest yet? Is that not a criminal activity in Slovenia? can they be extradited from Slovenia to U.S.? Do we have a treaty? If not, what other avenues can you pursue once you get the information on their whereabouts? I mean without cooperation with Slovenian law enforcement.
Mr. Lelling: You’ve put your finger on a key issue here, which is that so far the Slovenian government has not been willing to take the Karners into custody and extradite them to the United States. That is why the Karners sought refuge in Slovenia and stay there.
I agree with your point, which is that it’s my understanding as well that the Karners are not hiding in Slovenia. I assume they’re living openly in Slovenia. I’ve seen Mihael Karner on Slovenian TV stations. But we would need the Slovenian authorities to be willing to cooperate with us to extradite them.
Short of that, it would require us having information on the Karners’ travel plans, because if they were to leave Slovenia then using the cooperation of surrounding countries we then could have them arrested, much as the Austrians did at the request of U.S. authorities in 2012.
Question: Do you have an idea of the size of this organization? And does this organization have links with transnational organized crime? For example with groups of Mexico and other countries?
Mr. Scully: We know the Karners to have been a very successful organization, sending steroids not only to the United States but to other parts of the world. And we see that they were very successful and they made millions of dollars in their illegal activity.
What we also see here in Europe and across the world are these different transnational organizations working with each other. So it’s very common in these type of investigations where we see different organizations from different countries and different parts of the world working together, breaking the law, and making a lot of money in the drug trafficking.
Mr. Scully: In this investigation it’s a steroid investigation, so we don’t have links in this investigation relating to Colombians or Mexicans.
Question: Slovenia does not extradite their people. So you are actually willing to have information if the Karners family is going to travel abroad like Italy for example, and you need that kind of information, right?
Mr. Lelling: I think that kind of information would be especially useful to us. That’s correct.
Question: But in this case here are some media speculations. Would someone get a reward if he could, I don’t know, like kidnap them and took them to Italy? Because that means criminal act in Slovenia.
Mr. Lelling: I should be clear that we are not encouraging anybody to commit a criminal act in order to try and get this reward. So no, we’re not asking anyone in Slovenia to kidnap the Karners and take them to a different country.
I know it’s something of a strange circumstance because the Karners are living openly in Slovenia, but we find it unlikely that they never leave Slovenia. And so I think the most likely useful information for us is information about the Karners being elsewhere, leaving Slovenia for some reason.
Question: Do you have maybe some tips that they are leaving Slovenia or something like that? Because we, our journalist was just speaking with Mr. Karner and he told that he will never leave Slovenia.
Mr. Lelling: I think that that’s unlikely. Slovenia, I think the issues that the Karners have is that Slovenia begins to feel very small if you’re told you’re never allowed to leave it, and so I actually do not believe both based on common sense and based on some information we’ve seen in the past, that the Karners never leave Slovenia. I suspect that they do.
Question: Why now? What is nowadays different than it was nine years ago or for last nine years? Did some facts change that you are offering a reward up to $15 million for the whole family?
Mr. Lelling: The short answer is no. Nothing in particular has changed. It’s more that we’ve done what we can do. U.S. authorities invested a lot of resources into this investigation. We were able to charge the Karners. We had them through the Austrians in custody and then they got away. So since then we’ve looked into issues of seizing assets. We’ve added the Karners to what we call the OFAC list through the U.S. Department of Treasury. We’ve sort of done what we can do short of offering a reward. But there’s nothing that happened recently that prompted us to offer the reward. It’s really just the next step you would do in a major case where you’re trying to find out the location of a fugitive.
Question: You mentioned earlier you’re cooperating with other law enforcement offices from European Union. In the past there have been some activities about steroid traffickings in Italy and Great Britain, if I go right. The question is, since Slovenia delivers the citizens to European Union, are you planning to work that way so you could possibly try to get them extradited to USA from some other European countries?
Mr. Lelling: If they were to physically appear in another European country, with that country’s assistance we could have them extradited to the United States. The problem is that in Slovenia we can’t really do that. But over the course of this case we have worked with Great Britain, we have worked with Italy, we’ve worked with Slovenia, we’ve worked with Austria, we’ve worked with many countries in Western, Central and Eastern Europe. On this case and actually also on a related case that we successfully prosecuted.
So the short answer to your question is that if they travel within the European Union we can have them extradited by whatever country they travel to. The issues is them staying in Slovenia, because Slovenian authorities are not willing to extradite them.
Question: So what does someone have to do to get the award? So do you only need some kind of information? Photos?
Mr. Lelling: There’s a lot of different things that I think could lead to getting the reward. I think the phrase that we use is information leading to the arrest of one or more of these people. So the State Department in the U.S. decides whether it was information that led to the arrest, and they would just have to consider it as it happens.
I don’t think I can give you a really specific checklist about what actions would or would not qualify for the reward.
Kevin, do you have any thoughts on that? Anything to add?
Mr. Scully: I think the message that we really want people to understand is, the Karners are fugitives and we’re not giving up. And we want to see them arrested and then brought to justice in the United States. So if anyone has information that can identify their location, we have a process in place where we want them to contact the, for example, if it’s in Europe contact the United States Embassy or the Consulate in that country with the information. Then if that information leads to the arrest, then the process of people receiving a reward is through the committee back through the Department of State. There’s a committee and the Secretary of State make a determination of that information that was provided which led to the arrest.
Again, we said it before, but we’ll say it again. We’re not asking anyone to commit any crime or to violate the law. It’s very simple. If the Karners, who are fugitives, are traveling outside of Slovenia and you have that information, report it to the Embassy, let’s get them arrested, and then you will be rewarded.
Question: My question is about the charges actually. So is it the sale of these illicit steroids or also money laundering? And on the steroids, do you have any information where they are, where they come from, where they are put together and how the entire scheme works?
Mr. Lelling: As to the first, they are charged with distribution of steroids and with money laundering. They’re charged with both ends of the operation.
When we were investigating this, what we determined was the way this worked was for the most part the Karners were receiving the ingredients for anabolic steroids from China, among other places. They would assemble the anabolic steroids in a factory in Moldova, though I think perhaps elsewhere also, and then they would sell them over the internet through a network of re-mailers. What that means is if you got on the internet and you bought steroids from one of the Karners’ web sites, the drugs would not be mailed directly from the factory or directly from an address in Slovenia. The Karners would have other people spread around Europe do the mailing instead in order to make it harder to determine where the Karners were and where the drugs were being made.
Also when packages were coming through U.S. Customs, if packages are coming from certain countries they will receive less scrutiny from U.S. Customs than from other countries, and I think they took advantage of that as well.
Question: I was just kind of wondering, in the past what kind of success rate has the NRP seen? How successful has it been in international DEA investigations?
Mr. Lelling: I think it varies. I’m going to hand this one off to Kevin, though, who I think probably knows more about the overall success of the program.
Mr. Scully: The program’s been around for a while. It was established by Congress back in 1986. It’s just another tool that we use in our investigations, but it’s been very successful. It’s led to major traffickers being arrested, and as a result those people that provided information received the reward. So we think this is an effective tool for us to use in this investigation. The Karners are fugitives. They were identified as major traffickers. They made a lot of money in the business. And we’re doing everything we can to try to bring them to justice.
We know the Department of State has paid over $130 million in rewards to individuals who have come forward in the past that provided information that led to the arrest or conviction of major narcotic traffickers.
Also this program is successful because the U.S. government will ensure confidentiality to those individuals who are providing the information. And if appropriate, there’s even been instances where we may relocate those people and their families.
So it’s a very effective tool, and we hope that it’s effective in this investigation.
Question: I was wondering is this kind of criminal activity still going on? And Mr. Lelling, you were talking about the asset seizure, right? Can you elaborate a little more, where did you confiscate what, maybe in Slovenia or somewhere else. And what penalty is expected if they are convicted?
Mr. Lelling: As to whether this activity is still going on, the short answer is I don’t know. It may be, it may be not. The Karners being in fugitive status, our primary desire is to have them back on the charges that we have existing, so I couldn’t tell you sitting here now whether he’s still involved in the steroid trade.
As to assets, we tried to seize certain assets of the Karners in Slovenia. That was ultimately unsuccessful. It looked promising initially, but it did not work out. We were able to seize a yacht belonging to the Karners that was docked in Croatia, and we liquidated that yacht. We auctioned it off and we have the proceeds of it. Also the Karners own a ski lodge in Austria, which is under a modified form of restraints, meaning it may be forfeited by us, we may liquidate it. Right now I think it’s still available for use by the Karners, but they are not allowed to sell it. The Austrian government is preventing them from selling it. And if in the future the Karners are convicted of a criminal offense, we will be able to liquidate the ski lodge.
So on the asset side, it’s complex. There were many different kinds of assets and they’re all at different stages.
As to the penalties they’re facing, it’s up to 20 years on each charge in the U.S. indictment. Whether they would actually face that amount of time I can’t really comment. Often people do not. But as far as the United States government is concerned these are serious felony charges. It would be tough to overstate the amount of anabolic steroid dosages that the Karners distributed into the United States through their activity.
Mr. Scully: Just the last remark would be that we’re reaching out to the public. We need your assistance to locate the Karners when they are outside of Slovenia, and reach out to the U.S. Embassy in those countries. We look forward to hearing from everyone.