Cover Story

Murder, money laundering and the demise of Pablo Escobar


By Emily Primeaux, CFE; Illustrations by Kouzou Sakai // Folio Art

In late autumn 2019, Steve Murphy and Javier Peña — retired U.S. Drug Enforcement Administration (DEA) agents — were announced as keynote speakers at the 31st Annual ACFE Global Fraud Conference to be held in Boston in June 2020. The backdrop for their presentation and subsequent Fraud Magazine interview would be impressive — more than 3,000 attendees gathered in one spot to hear them speak in a city rich with history, culture and cuisine.

Alas, a global pandemic changes everything. Murphy and Peña would have to regale attendees with stories of drug smuggling, money laundering, and the capture and killing of Colombian drug lord Pablo Escobar from the comfort of their homes, not a conference room packed to the walls. Their backdrop included large “Narcos” posters — the hit Netflix show based on their time as DEA agents — on the wall behind them and their book, “Manhunters,” just over Murphy’s shoulder on a shelf.

Murphy and Peña later spoke to Fraud Magazine via Zoom from the Washington, D.C., area and San Antonio, Texas, respectively. Instead of sharing coffee in person, Murphy briefly paused at the start of the interview as he struggled to get his sound working and for Peña’s video feed to load.

Regardless of the setting, though, their telling of the investigation, capture and killing of Escobar — one of the world’s most-notorious narcoterrorists — and their time in Colombia leading up to Escobar’s demise, is one of murder, mayhem and downright investigational tenacity that captivates, even through a computer screen.

From small-town cops to the DEA

“You know, since I was a little kid, I just wanted to be a cop,” Murphy says. “I never wanted to do anything else in my life.” Murphy started his career as a uniform police officer in southern West Virginia in 1975, and after six years he moved on to become a railroad cop. He worked another six years with the Norfolk Southern Railroad, but he was always interested in narcotics investigations.

“It was 1976, and another young policeman and I, we were rookies, arrested a guy for a pound of weed,” he says. “In southern West Virginia, a pound of weed back then was a lot of dope. It shocked all these other cops that these two rookies were able to pull it off, and I liked the way the investigation went. So, it [narcotics] was always in the back of my mind.”

While working as a railroad police officer, another officer who’d worked as a Virginia State Trooper in the DEA task force out of Roanoke, Virginia, would tell Murphy stories of his time in the DEA and would encourage Murphy’s interest. So, in 1985, Murphy applied to the DEA and two years later (because of applicants’ backlog) the agency hired him to his first post in Miami, Florida.

“The late 1980s, if you wanted to be a DEA agent, that was the place to be,” Murphy says. “I got down there, here I am a new agent, and the most cocaine I’ve ever seen in almost 12 years as a cop is two ounces.”

Murphy says the first case he worked on in Miami was undercover. He and his partner, along with other agents, surreptitiously took a DEA boat to the Turks and Caicos Islands and picked up 400 kilos of cocaine. “So, I went from two ounces to 880 pounds,” he says. “You want to talk about addicted? I was addicted to drugs, but in a different way after that.”

Peña’s entrance into the world of narcotics started a little differently. He says he didn’t know what the DEA was in 1977 when he started in law enforcement in the sheriff’s office in Laredo, Texas. He was going to school during the day and heading into the sheriff’s office for work at night. He was getting ready to graduate from college with a sociology degree when he saw an advertisement for the DEA. “I had to ask somebody, ‘what the hell is this Drug Enforcement Administration?’ and one of the guys said, ‘Oh yeah, those are the federal narcs.’ ” He learned that they were paid more than the sheriff’s office, so he applied.

Like Murphy, it took nearly two years to hear back. “I didn’t know what I was getting into,” Peña says. “My plan was just to come on for a couple years, and my first assignment was Austin, Texas.” It was 1984, “the height of the music industry,” says Peña, but also a hotspot for LSD and meth. “I worked a lot of meth cases because Austin was the capital for meth back then,” he says.

Peña stayed in Austin for four years. Both men explain that an agent in the DEA spends their first four years in a domestic assignment doing the basics: the undercover work, the surveillances, weekend work, etc. “You start off at the bottom, you’re learning from everybody, you’re doing the dirty work,” he says. “I was doing a lot of smaller cases, but I wanted to see about the major leaguers.”

In 1988, Peña applied for a transfer for Mexico, but because of a paperwork error, he discovered he was going to Colombia. “I got Colombia on a mistake. I could’ve fought it because I didn’t put in for Colombia, but I told my boss I’d go.”

Murphy spent his four years in Miami. In 1989, his partner was shot and an informant was killed during a deal that went bad. At the time, his wife was a registered nurse and worked in ICUs, emergency rooms and trauma units. She asked Murphy, “This has been a really exciting life, but what’s the next most-exciting thing we can do?”

Murphy applied for transfer to Colombia in 1990 and was accepted to the Barranquilla office. But the DEA needed a Spanish speaker right away, and he wasn’t fluent. So, he reapplied to Bogotá, was accepted, attended six months of Spanish-language school and reported to Bogotá in 1991.

Escobar's reign of terror

Before Murphy arrived in Bogotá in 1991, Peña had been working on the Escobar case for more than three years. Two weeks shy of his placement in Bogotá, Peña’s boss, Joe Toft, San Antonio’s assistant special agent in charge, was selected as the U.S. DEA country attaché in Colombia. They arrived in the country at the same time.

“In the DEA you’re known as a worker, it’s your reputation. You know, Steve and I are both good workers,” says Peña. “So, my boss says, ‘We’re going to assign you to the Pablo Escobar case.’ I’d heard of him, but I’d never dealt with any of his cases. In Austin we were too far removed.” So, he started slowly learning, making his contacts and working with a specialized group of Medellín cops.

Notoriously violent, powerful and ruthless, Escobar ruled the Colombian cocaine trade during the ’80s and early ’90s. “We called him the inventor of narcoterrorism,” says Peña. At any given time, Escobar had 40 to 50 tons of cocaine ready to sell. During the height of Escobar’s “career,” Forbes listed him in its international billionaires list seven years in a row with an estimated total worth of $8 billion to $30 billion.

Escobar’s reign of terror was unprecedented. He had at least 500 “sicarios” (or hitmen) working for him. His chief assassin, Dandeny Muñoz Mosquera, also known as “La Quica,” was responsible for the 1989 bombing of Colombian Avianca Flight 203, which killed 110 civilians.

In 1989, Escobar ordered the assassination of Luis Carlos Galán, the shoo-in for president, who was campaigning on a platform of extraditing Escobar and destroying his cartel. He was shot onstage during a campaign event.

Escobar also put bounties on police officers and planted car bombs in malls, shopping centers and a bookstore where parents and kids were getting supplies to go back to school. “It was on a daily basis. Every day it was like, ‘What did he do now?’ ” Peña says. He also ordered the killing of anyone who talked about extradition to the U.S.

During these 3½ years, Peña says he would go to Medellín for two or three days at a time and then head back to Bogotá, and because of the violence and danger in Medellín at the time, he always stayed at the base.

Some Colombians admired and even revered Escobar. “In Medellín, the poorer neighborhoods, they call them comunas, a lot of these young kids … they’re already learning to become criminals,” Peña says. “They’re 13, 14, 15, and they idolized Pablo Escobar. It’s that Robin Hood aura Pablo Escobar had about him.”

Peña says Escobar was grandiose. He drove around with armed bodyguards and closed down clubs, bars and restaurants with his parties. Escobar built soccer fields, schools and homes, and as a result, everyone wanted to work for him. “You’d be surprised by the amount of people at his meetings … 200 or 300 of these kids who wanted to work for Escobar,” Pena says. “And Escobar had that charisma. He’d hug them, he’d kiss them, he’d give them money and build them homes, so everybody idolized him and said, ‘I’ll work for you, I’ll kill for you.’ So, it was that attitude that we were dealing against.”

These dedicated sicarios and their families would hide Escobar and smuggle him out when police showed up. “We didn’t have many people calling us up to say, ‘Hey, we know where Pablo Escobar is.’ No one wanted to go up against Escobar,” he says.

Escobar popularized the term “plata o plomo” when he dealt with those who challenged him. Do you want money (plata, or silver) or do you want a bullet (plomo, or lead)? In one case, he tried to pay off a judge and when the judge wouldn’t comply, Escobar had the judge and his family killed.

During this time, Murphy was still in Miami, but he was hearing much more about Escobar than Peña did before he was placed on the assignment. “When I got to Miami, Pablo and the Medellín Cartel controlled South Florida,” Murphy says. “The Cali Cartel [a competing cartel that would rise to prominence following Escobar’s death] had no influence whatsoever. It was all Pablo. So, if you were involved in the cocaine business in any manner at all, you were directly or indirectly with or against the Medellín Cartel.” But as a rookie agent working for senior agents, Murphy says he never had a case in Miami that got close to Escobar.

Escobar surrenders ... Murphy and Peña wait

Murphy arrived in Bogotá in 1991 not knowing he’d be working on the Escobar case. “You don’t know until you get there,” he says. On his first day in the office he met Peña, Gary Sheridan (Peña’s partner at the time who’d later be promoted to Barranquilla) and the rest of the team working to catch and kill Escobar. But, just three days after his arrival, Escobar turned himself in. “I like to tell everybody he heard Murphy was in country, and he might as well give it up,” Murphy laughs.

In reality, Escobar called up the president of Colombia and said he’d be willing to stop his violence and surrender in exchange for no extradition and a five-year sentence in a self-built prison, which he coined “La Catedral,” which his own sicarios would guard. And he would be allowed to keep his riches. “The conditions he surrendered to was something like out of a movie,” he says. “Nobody could go into the prison. No visitors, no checks, no control. … That prison was off limits. We knew that he was going to continue his trafficking activities.”

Peña and Murphy sat tight. “That period was about a little over a year, and we just were monitoring him,” Peña says. There were still many other drug investigations to work in Colombia, so they started working those cases. “Until that fateful night that he escaped,” he says. “Steve and I were there the very next morning.”

They say what they discovered inside the prison was like a country club — the farthest thing from a prison they’d ever seen in their life. Murphy says the back-perimeter fence had a hole in it where people could come and go as they pleased. Escobar was building a series of cabanas and chalets on the back hill of the prison where he would throw parties. Escobar’s cell was a two-room suite that had a microwave oven, a refrigerator, a freezer, a king-sized bed, a fireplace in his bedroom and a Jacuzzi tub in his private bathroom. “Now, all the prisons I’ve been in, they have what are called ‘group showers,’ ” Murphy says. “It just confirmed everything we suspected.”

After serving one year of his five-year sentence, Escobar escaped his cushy castle prison because his ego got in the way, according to Peña. “He thought a couple of his lieutenants were stealing money from him, which was not true,” he says. Sicarios in Medellín had unearthed about $10 million in deteriorating bills. They were jealous of the two lieutenants because they were Escobar’s favorites. So, they brought the money to Escobar and claimed the lieutenants had been holding onto it. Escobar told his security to bring in the lieutenants for a supposedly friendly meeting. Peña heard stories that the two lieutenants told Escobar they’d forgotten they’d even buried that money, but Escobar went ballistic and murdered one of the lieutenants, his best friend. And Escobar’s sicarios killed the other.

The Colombian government heard about the killings, so they decided to move Escobar to another prison as punishment. Peña says the government sent only 20 officers to move him, a firefight ensued and Escobar escaped.

18 months and a second chance

After Escobar’s escape, Murphy and Peña’s investigation increasingly intensified. They no longer traveled to and from Bogotá. They were embedded with the police in Medellín — they lived and ate meals with them. The DEA didn’t allow Murphy and Peña to leave Colombia at the same time or take vacations. Murphy’s wife stayed alone in Bogotá, and Peña’s family in the U.S. wondered when he’d be able to return to visit. “It was our only mission,” Murphy says. “And this is really important: The cops made it clear to us that this wasn’t about seizing drugs and it wasn’t about seizing money; it was about capturing and killing Pablo Escobar and taking out the Medellín Cartel.”

They also brought in agents from Bogotá and other cities outside of Medellín. “The mistake we made the first time around was we were getting cops to work with us that were from Medellín,” Peña says. “I remember there were a couple lieutenants at our Search Bloc [translated from Bloque de Búsqueda, the official name of the group assigned to pursue Escobar], and we would have great information of where Escobar was at and when we would get there, Escobar was gone.” They later learned that Escobar had gotten to the families of these lieutenants in Medellín. “The good thing was that our task force [the time after Escobar’s prison escape], the specialized group we had, was pretty much controlled after we made these mistakes,” Peña says.

This time, the Colombian and the U.S. governments were totally committed. “Like Javier said, we didn’t just say, ‘Hey, we’re going up to Medellín to work.’ The government of Colombia called the U.S. ambassador and said, ‘Hey, we want Peña and Murphy to be up here with us,’ ” Murphy says.

They say they tried a new tactic with Escobar. “We started hitting him financially,” Peña says. He says they’d raid the financial offices of money launderers in Colombia, rent warehouses to have “Xerox parties” and copy all the records. They worked with analysts who’d find all the bank accounts related to the U.S., and the DEA would freeze the accounts of Escobar’s biggest money launderers. They were wreaking havoc on his finances and money-laundering activities.

During the first two months, Peña says they felt like they were getting close to Escobar. Then, abruptly, things died down — they couldn’t find him or intercept his communications for the better part of a year. And yet, they continued to see bombings and murder. “I’ll be honest, it got to a point where our attitude was to let him surrender,” Peña says. “Innocent people will be saved, we can’t win against this guy. Just let him surrender. But I’m glad we never got to that point.”

Sixteen months later, on Dec. 2, 1993, while Peña was gone to Miami on orders from the U.S. ambassador to Colombia to check on a lead, Murphy noticed commotion at Colombian police general Colonel Hugo Martínez’s office. His son, Lieutenant Hugo Martínez Jr., had picked up on a frequency for one of Escobar’s cellphone calls and located his hideout. Colombian police raided a three-story row house, and after a gunfight with his lone bodyguard — most of his sicarios had been killed or arrested by then — Escobar raced to the third floor. “He [Escobar] heard that gun battle outside, but he also has a gun battle going inside, so he jumps out his window,” Murphy says. “But he knows it’s only a matter of seconds before cops will get to that third-story window and he’s going to get caught in a crossfire.”

Murphy says Escobar tried to make his way across the roof when cops arrived to the window and ordered him to drop his weapon. Escobar didn’t comply. “He’s hit three times that day,” Murphy says. “He’s hit once in the back of the leg, once in the butt cheek, which both of those are knock-down shots — they’re not kill shots. And then the kill shot was a bullet through his right ear into the brain.” Though dramatizations in “Narcos” show Murphy at the scene during the shootout, he says he arrived later to identify the body for U.S. authorities.

“As the operation is going down, of course, it gets real quiet on the radio,” Murphy says. “That minute or two just seemed like hours. … Finally, one of the majors that Javier and I worked with comes on and says, ‘Viva Colombia! Pablo Escobar is dead.’ Then the cheering starts in the colonel’s office, we’re high-fiving and still loading troops outside.” Murphy rode out to the site with Colonel Martinez and said when he arrived police were celebrating. “I get to that third-floor window and I’m looking down at Pablo’s body and there are the guys who had just been in the firefight with Pablo,” Murphy says. “These are our friends that we’ve been living with for 18 months! And they’re holding their rifles up and they’re shouting and cheering.”

Both Murphy and Peña say that the true heroes in this story are the Colombian National Police who worked the case from the beginning and finished the job on that December day.

Advice for fraud examiners

So, what do two small-town country boys who landed one of the most-notorious drug- and money-laundering cases have to say to fraud examiners? “I’ve never been a financial guy,” Murphy says. “I don’t have the mental capacity, training or experience like ACFE members do to pursue the money angle. So, it goes back to a saying that we all know very well: Don’t ever give up.”

Peña’s advice is similar. He encourages CFEs to stay the course, research every layer and every actor, and look at all the details — even the minor ones. “I have to congratulate fraud examiners,” he says. “They’re going after the cheaters, the liars, the guys who are stealing money from innocent people, so keep at it. We need people like y’all.”

Emily Primeaux, CFE, is associate editor of Fraud Magazine. Contact her at eprimeaux@ACFE.com.






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By Anonymous
Very nice article! Gregory Kapsowe, CFE