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Latin American drug traffickers are searching for new, untapped markets. Though the United States is still the world's largest market for illegal drugs, cocaine use here is in steep decline. To fill the void, cocaine smugglers have developed a booming trade in Australia.
As NPR's John Burnett reports, the problem is acute in cities like Sydney were nightclubs brim with young people who are curious and prosperous.
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JOHN BURNETT, BYLINE: Australia is a big island. This lonely, rocky coastline extends for thousands of miles. What's more, there are lots of harbors and airports. In short, there are plentiful opportunities for an enterprising drug trafficker to move his product 8,000 miles across the Pacific, to service the vibrant new market down under.
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BURNETT: That drug lord is Joaquin Chapo Guzman, head of Mexico's Sinaloa cartel. He's a cunning, small-statured, exceedingly dangerous outlaw, recently dubbed the world's most powerful drug trafficker by the U.S. Treasury Department.
JOHN LAWLER: My name is John Lawler. I'm the chief executive of the Australian Crime Commission. Well, Australia has a very significant cocaine problem. Progressively, Mexican organized crime, our intelligence tells us, are playing a more active role.
BURNETT: In the past four years, Guzman has expanded his reach throughout western Mexico and the world. In 2012, Chapo has operations in North America, Central America, South America, Europe, Asia, Africa, and now Australia.
RODNEY BENSON: They're in the business of making money and they've able to move in a more global way, faster than some of the other cartels.
BURNETT: Rodney Benson is chief of intelligence at the DEA.
BENSON: So, they've recognized in a place like Australia, where the price of cocaine can yield them a much greater profit margin compared to selling a kilogram here in the United States.
BURNETT: The markup is impressive. A kilogram of cocaine in Brownsville, Texas, sells for $16,000. The same brick goes for up to $250,000 in Sydney. That's a jump in profit of 1,500 percent. It's no wonder Latin America's cocaine cowboys want to get in on the Aussie action.
Australian authorities have ramped up border enforcement to try and control the blizzard. The Australian Federal Police reports cocaine seizures increased 103 percent in 2010 to 2011, compared to the previous fiscal year.
The big busts were reported by the Australian Broadcast Corporation.
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BURNETT: The Sinaloans are endlessly, legendarily resourceful. On the U.S.-Mexico border, they use tunnels, 18-wheelers and Ultralites. In Australia, traffickers hide cocaine in freight as varied as paving stones and lawnmowers, it's sent through the postal system, couriers tape it to their bodies, and private yachts ferry it across the blue Pacific.
The loads don't necessarily come directly from Mexico or South America. They're often transshipped from third countries, such as Nigeria, the Netherlands, Canada, and the island of Vanuatu.
Again, John Lawler, head of the Australian Crime Commission.
LAWLER: With such a very, very large coastline and with the opportunity of cartels and other organized criminals coming to Australia through multiple routes, to try and detect each and every seizure is an extraordinarily difficult task.
BURNETT: Once the cocaine is in Australia, local crime syndicates take over. Federal investigators have intelligence that Sinaloa operatives have visited Australia to link up with local drug distributors. And Australian traffickers have traveled to Latin America to do the same.
Nick Bingham, commander of the New South Wales Police drug squad, says extravagant cocaine profits have attracted all of Australia's organized crime gangs: the Lebanese, the Chinese, the Albanians, and homegrown outlaw motorcycle gangs known as bikies.
NICK BINGHAM: Some of our larger groups are the Hells Angels, the Rebels, the Banditos, the Comanchero, the Nomads, the Gypsy Jokers. And certainly they're heavily involved in all sorts of organized crime, but cocaine is becoming a more attractive market to them.
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BURNETT: There's a queasy sense of dÃ©jÃ View that an American gets when he noses around the cocaine scene in Australia. We've been here before.
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BURNETT: America nose the price of 35 years of cocaine abuse: perforated septums, catatonic crackheads, and overdose deaths of personalities like basketball star Len Bias in 1986. Not so in Australia, where the country is in the midst of what one newspaper called a national cocaine binge.
Mark Ferry is a drug treatment counselor in Sydney.
MARK FERRY: It's seen as a very desirable drug. It's seen as a cleaner drug in some respects, especially compared to amphetamines. You know, it's in the media, it's in the news. They want to try it, they like it, and away they go.
BURNETT: One of Ferry's clients is Raymond, a tall, jittery, 17-year-old Aboriginal boy from the Sydney suburb of Redfern. He was caught shoplifting to support his coke habit and sent here to the Noffs Foundation drug treatment center.
RAYMOND: When I first used it, it just made me feel happy. You go longer in sex. I mean, you just feel energetic when you're on it. So I just kept using and using.
BURNETT: Cheap crack cocaine has not made it to Australia, presently. The high price of powdered coke prevents more poor kids like Raymond from becoming cokeheads. The typical profile of the modern Australian cocaine user is young, single, well-educated, and well paid.
BLADE: My name is Blade. I work in the industry, so I do take photos for different nightspots around.
BURNETT: Meet Blade, the name he chose for this interview. He's a fair-haired, 23-year-old club photographer who met me at a trendy rooftop bar in Kings Cross, where good-looking young people quaff glasses of Victoria Bitter and check their iPhones.
BLADE: Oh, I could get it here in 10 minutes if I wanted to. I couldn't get, you know, a pizza delivered in 10 minutes. So, that's how fast and easy it is to get it.
BURNETT: A shrewd merchandiser doesn't just supply a market, he creates demand for his product. And that's what's happening with cocaine in Australia.
BLADE: Cocaine is a little bit more fabulous, sorry. You've got money in Sydney, because it's so expensive that only the cool kids, rich models and designers and musicians and all the cool kids do it. So, you look cool if you do it, pretty much.
BURNETT: Do you ever think about the fact that by doing a line of coke, you directly support murder and mayhem in Latin America?
BLADE: Yeah, I guess we live in this bubble. And so, when you go out and party the last thing you're thinking about is, you know, who you're affecting directly by doing something illegal like cocaine.
BURNETT: The bubble is unlikely to burst anytime soon. A strong Australian dollar, healthy economy, and the drug's image as a little bit fabulous ensures the expanding popularity of cocaine Down Under.
John Burnett, NPR News.
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