"HOUSE WAS TO BE MARIJUANA FARM"

Saratoga Family, Others Allegedly Ran Drugs, Laundered Money

It was once the site of a nondescript two-story home in a residential
neighborhood in Saratoga. But owner Michael Costa demolished the first
level and propped the second on stilts. He dug a 4,000-square-foot hole and
built a concrete vault.

He told neighbors he was converting the property at 12623 Quito Road into
an underground garage for his elaborate collection of Ferraris, Harleys,
old Chevys and sport-utility vehicles.

But an 18-month investigation that wrapped up last week with 14 federal
indictments alleged that Costa, 37, was the head of a highly profitable
marijuana-smuggling ring and was planning to use the site as an indoor
oasis for more cultivation.

Costa harvested pot in at least two other homes in Santa Clara County, and
since January 2000 had peddled about 20,000 pounds of the drug for $8
million, laundering much of the profit through real estate, according to a
53-page affidavit recently unsealed in U.S. District Court in San Jose.

Federal prosecutors allege that Costa, co-owner of a Santa Clara
manufacturing company called Powerspec, directed people, including some of
his relatives, to help him transport the drug from California and El Paso
and sell it to large dealers on the East Coast, primarily the Boston area.

For about $5,000 a trip, officials said, young couriers would pack
1,000-pound loads of leaves into secret compartments of vehicles, then
drive across the country with a convoy of others serving as lookouts.
They'd box the cash proceeds and send the money back via UPS or Federal
Express, authorities said.

When they flew, records said, they'd stuff the pot into checked luggage and
tape the cash to their bodies.

"He not only used drugs and luxury cars to bedazzle these people, but when
the enticements didn't work, he'd use violence and guns," said Elizabeth de
la Vega, chief of the San Jose branch of the Northern California U.S.
Attorney's Office.

She referred to an incident in September when Costa reportedly lured an
employee and his girlfriend to San Jose, where he had the man beaten with
fists and guns and threatened with a pit bull that licked his blood off the
floor. The incident occurred at the same home at which authorities allege
Costa ran an escort service, Naturally Naughty.

As the courier remained tied up, the affidavit says, his girlfriend was
sexually assaulted in the home by a man and a woman.

Costa's lawyer, Phil Pennypacker, in a statement, said his client stands by
his not-guilty plea and that he expects to present "a vigorous defense."

The criminal complaint names Costa and several members of his family,
including his father, Edward, and wife, Jessica, all Saratoga residents.
Overall, 14 people have been linked to the nationwide smuggling operation,
all but three of whom are in custody and scheduled to appear in court today.

The fugitives are San Jose residents James Benninghove, 43, and Toribio
Calvillo, 25, both of whom are accused of being drug and money couriers;
and Shawn Lessieur, 29, of Massachusetts, charged with distributing pot for
Costa in the Boston area.

Many of the alleged conspirators reportedly helped Costa carry out the
scheme by keeping his name off bank accounts and weapons permits, among
other traceable evidence. Costa, a convicted felon whose past crimes
include burglary and possessing stolen property, wasn't allowed to carry guns.

Costa's father, co-owner and president of Powerspec, is accused of
laundering drug proceeds for Costa by serving as a straw owner on real
property. He also reportedly deposited large amounts of cash in many
accounts to avoid detection.

Some aspects of the case are not detailed in court records, because the
investigation is ongoing, but prosecutors said it appears he invested the
drug profits in real estate.

Costa owned, or was linked to, 11 homes in Santa Clara County and one in
Calaveras County. According to the affidavit, Costa also used a fictitious
construction company, Power Development, to launder the drug money.

Tanya Tran, who lives behind the "pit," as she called the Quito Road home,
said it attracts gawkers on a daily basis. Seconds earlier, two people in a
pickup inched by, laughing as they pointed out the home.

Tran and her husband, Hai Luong, said they tried being patient with Costa
until his hole-digging took down the fence dividing their houses and caved
in their yard.

"Imagine, they were going to have a little plantation over there," she
said. "That's so dangerous for my children."


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Pubdate: Tue, 30 Apr 2002
Source: San Jose Mercury News (CA)
Copyright: 2002 San Jose Mercury News
Contact: letters@sjmercury.com
Website: http://www.bayarea.com/mld/mercurynews
Details: http://www.mapinc.org/media/390
Author: Roxanne Stites