Lachlan McConnell, a fifty-year-old Canadian with thinning hair and a résumé lined with security jobs, often found himself at the terminus of Le Roux’s river of cash. As one of Le Roux’s employees on the ground in Hong Kong, he was responsible for what those in his line of work called “asset protection.” “It seemed like a constant stream of money coming in from the U.S.,” he recalled. “Money turned into gold.” Hundreds of bars of gold. Thousands of pounds of gold. Tens of millions of dollars’ worth of gold. Money that arrived into accounts for companies Le Roux controlled—Ajax Technology, Southern Ace, East Asia Escrow, and at least two dozen others—was wired to the local subsidiary of Metalor, a Swiss precious metals dealer, to purchase gold bars. That’s where McConnell’s role began. From his home in Manila, he flew to Hong Kong to supervise runners who picked up the gold, along with an occasional diamond purchase, and transported it to any of several properties Le Roux owned in the city. Each stash house was outfitted with a large safe. From there, the gold would often be packed in military-style black plastic trunks called Pelican cases and moved to the waterfront, to be loaded onto a yacht bound for the Philippines, where Le Roux was based. Sometimes an entire safe might make the trip. On other occasions, the cases were driven to the airport and handed to a pilot to carry, unchecked by customs, on board Le Roux’s jet. McConnell didn’t inquire about the destination.
Lachlan McConnell was one of the players on a darker side of Paul Le Roux’s business, one stocked with modern soldiers of fortune, mercenaries who operated outside the digital realm, in the world of atoms, metal, and flesh. Employees on any one side of Le Roux’s multifaceted operation were told little or nothing about those on the other. For people like Moran Oz, who subsisted in the virtual world of RX Limited, whispers of Le Roux’s other endeavors amounted to puffed-up rumors and scare stories. For the likes of McConnell, on the gold-and-guns side of the business, RX Limited was just an abstract explanation for how his boss made money. The mercenaries’ modus operandi was on the ground, providing the manpower and muscle for a staggering array of projects around the globe.
McConnell joined Le Roux’s business in 2008, hired by a friend and British ex-soldier named Dave Smith, who told him only that the client was “a very wealthy individual who had multiple businesses, including but not limited to the world’s largest pharmacy.” McConnell had lived in the Philippines for a half dozen years, bouncing around in the risk-management industry—a catchall label for everything from guarding industrial sites to personal protection for VIPs to corporate surveillance. He’d gotten his start in his native Canada, working protection details for politicians and diamond dealers, before moving to L.A., where he’d provided security for the likes of Sylvester Stallone and O. J. Simpson. Although he’d never served in the military, McConnell was fluent enough in its lingo—“mission planning,” “comms”—that colleagues often assumed he had. He arrived in Manila in the late 1990s, on a contract to oversee protection for a dam project, and stayed. He’d met Dave Smith while both were working for a Manila-based security outfit. Smith left the company under acrimonious circumstances around 2005, and then resurfaced not long after in the employ of Le Roux. How the job came about exactly, McConnell was never sure. But in short order Smith had become Le Roux’s de facto head of security and right-hand man, and he offered to bring McConnell on board. Le Roux wasn’t just looking for people to help him wash his money. He was looking to expand his criminal horizons.
Smith himself epitomized the kind of untethered international mercenary he would soon hire to fill Le Roux’s ranks. He hailed from Northern Ireland and had served in the British military—often he claimed to have been a member of the Special Air Services, an elite special forces unit. “I was in the Regiment,” he would say, employing the SAS shorthand. Some Le Roux employees doubted it, but Smith at least carried himself like a well-trained military officer, and his work history seemed to back it up. So, too, did the scars crisscrossing his upper torso, which he said he’d gotten fighting in the Falklands War. He’d spent time in the United States, where he married an American, working as a SWAT team trainer in Boston. “Dave bred loyalty,” said Scott Stammers, another contractor Smith brought into Le Roux’s organization. “I kicked down doors with Dave. Dave had two sayings: ‘Train how you fight’ and ‘Smooth is fast.’ ”
In the late nineties, Smith joined the security contracting circuit, working for a series of unusual clients. In 1998, he surfaced in Liberia as a military adviser to Charles Taylor, the country’s notorious warlord-president. Smith grew particularly close to Taylor’s son, Chucky, mentoring him in combat strategy as the younger Taylor worked to build his own independent military force. After the unit was involved in the slaughter of a rival political group, Smith disappeared from the country. (Charles Taylor was later convicted of crimes against humanity by an international court in The Hague, while Chucky landed in an American prison, convicted of torture.) A few years later, Smith turned up in Iraq as a contractor for Crucible, a United Kingdom–based outfit filling one of the countless security gaps opened by the American invasion. “The difference between a contractor and a military guy is I’m getting paid five times as much,” Smith told Esquire in a 2004 story on contractors working in Iraq. “And I can tell you to get fucked if I don’t want to do it.” Along the way, Smith had left his wife and relocated to Manila, where he eventually quit the war zones and started working for Paul Le Roux.
Smith’s nominal job was head of security, charged with hiring muscle like McConnell and using it to project his bosses’ authority. But the scope of duties sometimes felt limitless. McConnell’s first task was to oversee the construction of a shooting range Le Roux was building in Manila, connected to a gun shop he owned called Red White & Blue Arms. A month later, seemingly satisfied with McConnell’s work, Smith began dispatching him on international missions. “Dave gave me instructions on what needed to be done,” McConnell said. “It was pretty harmless stuff. Good money, working for a rich guy.” Le Roux had enlisted what he called “dummies”—family members and associates with clean criminal records he could use as proxies—to register his companies under their own names, or open bank accounts. McConnell’s job was to keep an eye on the dummies and make sure they went where they were told. Most were Filipino, but Le Roux also counted among his dummies an out-of-work Zimbabwean named Robson Tandanayi, and an elderly South African man named Edgar van Tonder. “It was just babysitting,” McConnell said.
McConnell was soon trusted enough to take orders directly from Le Roux, whom he found to be overbearing but otherwise tolerable. “He was impatient in emails, strict,” McConnell said. “He would say, ‘This is a fuckup, do what you can do to straighten people out.’ Two or three times he sent me an email to say you can’t do it this way or that way. Or ‘Hurry up.’ He wanted things bang bang bang. He micromanaged everything.” Occasionally they would meet face-to-face in Manila, and at first McConnell saw little in Le Roux’s demeanor to raise alarms. “I found him to be a really nice guy,” he said. Le Roux was clearly a wealthy man, but rarely seemed to flaunt it. “He lived in expensive houses in exclusive areas, but he didn’t live extravagantly. He would travel in flip-flops and shorts, like a bum.”
McConnell’s Hong Kong duties eventually expanded to include obtaining and transporting gold around the city, and out of it. Le Roux was bringing in $6 million a week from his U.S. pharmacy operation, Smith told McConnell, and needed to convert it to hard assets. “Initially Paul’s thought was to hire a company like Brink’s to pick up the gold and move it around,” McConnell said. “I said, ‘Let’s go low profile and move it ourselves.’ ”
McConnell wasn’t oblivious to the fact that he was, at the least, working for someone operating on the edge of the law. The tentacles of Le Roux’s empire spread so far that he couldn’t see their endpoints, but he knew that they included gold mining and logging projects in Africa, and that his boss owned properties in Asia and Australia. There was talk of darker businesses—that some of the money flowing through Hong Kong was being laundered on behalf of Colombian or Brazilian cartels, or that Le Roux was involved in hardcore drug trafficking himself. “I did know what I was getting into when I started, in terms of the secrecy involved and the precious cargo being moved,” McConnell said. “I’m not a stupid person. In some ways there were things that were probably illegal, but I didn’t really pay attention. He kept everything so compartmentalized. I heard rumors, but I didn’t consider them to be valid without one hundred percent proof.”
Some combination of financial necessity and geographical proximity explained why most people drifted into Le Roux’s organization, often with little conception of the devil’s bargain they were making by signing up. So it was with Felix Klaussen. At the moment he crossed paths with Le Roux in 2007, Klaussen was trying to keep alive a dream life in the Philippines. A former navy diver from Europe, he was living in a condo on Baloy Beach, a glorious stretch of sand in Barrio Barretto, on the west coast of the country’s main island. The town had for decades served as an off-duty playground for the sailors at Subic Bay, a U.S. naval base a few miles south. The Americans decommissioned the base in 1992, but the area still maintained a kind of burned-out Fleet Week atmosphere, attracting a clientele of sun- and sin-seeking expats, many of them retired military. The main thoroughfare included the upscale Subic Bay Yacht Club, along with seedier stops like the Wet Spot and Coco Lips, offering cold beer and “bar girls,” the Philippine euphemism for government-tolerated prostitution.
Klaussen resided largely on the sun-seeking end of the spectrum. He’d first fallen in love with the Philippines in the late 1990s, when he worked as a wreck diver in Subic, escorting tourists out to see the scuttled USS New York just offshore. In his youth he’d been a champion swimmer, talented enough to have a shot at the Olympic team. But his motivation had come more from a hard-driving father than from any inner desire, and at eighteen Klaussen gave up swimming and joined the Navy, training as a diver whose duties included disabling sea mines. After leaving the military he’d drifted to Baloy, where a friend from his hometown owned a resort.
Klaussen returned home from the Philippines a few years later and took a desk job at a pharmaceutical company, thinking he would settle into a staid, predictable life. Then, in what he later came to view as a bit of twisted fortune, a motorcycle wreck in 2003 left him hospitalized with titanium rods in one arm. Fortunately, his home country had universal healthcare. Coverage included not just the surgery but his salary: fully paid for the first year after the accident, then 80 percent the second, 60 percent the third. Klaussen figured he could make the money last back in the Philippines. So he headed back to Baloy to spend his days lounging on the government’s dime.
By late 2006, the end of this arrangement was on the horizon. But this time Klaussen, now in his late twenties, was determined not to slink back home. He’d fallen in love with a Filipina woman he would eventually marry, and would need a local job if he wanted to stay. An old friend who also lived in the Philippines, Chris De Meyer, who had served in the French Foreign Legion, told Klaussen he was working security for a rich man in Manila. The boss was some kind of Internet mogul whom De Meyer knew only as Johan. “Ask him if he could use anyone else,” Klaussen told his friend.
A few months later, Klaussen was summoned to meet Dave Smith. He made the three-hour drive to Manila and they convened at Sid’s, an expat-friendly pub owned by Johan just outside the city’s red-light district. Smith asked Klaussen a few questions about his military and work experience, and seemed particularly intrigued that Klaussen had once run a home renovation business. “Okay, tomorrow let’s go see Johan,” Smith told him.
The next morning Klaussen arrived at Salcedo Park Twin Towers in Makati City, the high-end business quarter. He took the elevator up to the penthouse, where three guards manning the door searched him for weapons. What the hell is this guy all about? Klaussen thought to himself. Inside, Smith introduced him to Johan, a heavyset man with dyed-blond hair, sloppily dressed. In the room there were a table with four chairs, a sofa, a plasma TV. The rest of the condo was largely unfurnished, and appeared uninhabited. “I started to realize that this guy is ready to pack every single moment of the day,” Klaussen said. “That’s why he lives like that. He’s just ready to pack up and go.”
Johan sat down and said a few words of greeting, and then immediately switched to business. They spoke briefly about Klaussen’s military experience and his knowledge of home construction. “Good,” Johan said. “Tomorrow you are flying to Port Moresby, Papua New Guinea. Is that okay?”
Klaussen had never heard of Port Moresby. But he was a man blessed with a preternatural mix of optimism and self-confidence. Besides, he needed the work, and the abruptness of Johan’s offer carried with it a sense of adventure. Why not? he figured. He agreed to go.
That night, while packing, he did what Internet research he could, discovering that Papua New Guinea was among the most dangerous countries in the world. His duties there, Smith had told him, involved shopping for houses with ocean access in the small town of Madang, on the country’s northeastern coast. He flew to Port Moresby, caught a smaller plane out to Madang, and found a dodgy hotel within the budget Smith had given him: 80 U.S. dollars a day. Then he set off in search of a waterfront house to meet Johan’s specifications. “I had to report back to him, tell him the price, show him pictures of the property,” he said. “Give him the local real estate guy’s contact details, and then his lawyer took care of the rest. So basically that was it, very easy, very simple, no nonsense job. But because I was in construction he expected me to check everything properly, that the property was in good condition. Which made sense, in a way.”
When Klaussen came back to the Philippines, Johan hired him on a $4,000 monthly salary—enough to afford an upscale lifestyle in Manila. Periodically Smith would call with a job, or Johan himself would request Klaussen’s presence at the Salcedo Park penthouse, and he’d be sent off on a new mission. For the first few months his tasks followed the same blueprint as the trip to Papua New Guinea: Catch a flight, shop for waterfront property, report back, fly home. Klaussen picked out a house on a golf course in Phuket, Thailand. He flew to Vietnam to do the same in Da Nang.
Like McConnell, Klaussen quickly realized that Johan was more than just a successful Internet businessman. He was never explicitly told why the organization required so many oceanfront properties. But it wasn’t hard to see that the houses were being purchased in the names of shell companies, or by people he never interacted with and wasn’t sure were even real. Ostensibly the homes served as a base for employees, who could stay at them if Johan sent them to conduct some business in the country. In some cases, the employees were simply parked in them, ready to be activated when needed. “I knew one Filipino who was staying in a house with a swimming pool by himself in Mombasa for like two or three years, basically doing nothing,” Klaussen said. “Getting a salary on standby. ‘Go find out this, go to the port, ask the price for a shipment for that small stupid thing.’ ” But it dawned on Klaussen that the properties served a second purpose, as safe houses to which Johan himself could escape. “You’ve got all these properties all over the world where you can just drop somebody 500 meters from the coast by boat,” Klaussen said. “He’s under the radar, nobody is going to find him in that place. Who was going to look for him in Papua New Guinea?”
By late 2008 Lachlan McConnell’s own duties expanded to involve a series of missions across Africa. Le Roux had launched a patchwork of logging and gold-buying operations spanning the continent, requiring a constant rotation of security teams overseen by Dave Smith. In search of raw, untraceable gold to buy locally, transport across borders, and then sell at a profit—disguising his own money in the process—Le Roux sent his personnel to procure it on the black market in cities like Accra, in Ghana, and Brazzaville, in the Republic of the Congo. Other times he sent them deep into the jungle to buy from the source, small local mines. McConnell found himself working alongside a shifting cast of ex-military journeymen, hired by Smith and dispatched to lawless regions, carrying in bags of cash and transporting out crates of gold that eventually made their way to Hong Kong.
The stories of how these mercenaries ended up in Le Roux’s organization often followed the same pattern. They were former soldiers who had plied the waters of the international private security circuit, flush with gigs during the height of the Iraq and Afghanistan wars. As those conflicts wound down, the men suddenly found their military training a surplus commodity in a flooded labor market, just as a worldwide recession took hold. When they crossed paths with Dave Smith—or heard through their own networks that a rich man was paying decent rates for “gray area” jobs—they jumped at the chance put their skills to work somewhere other than a war zone. “Dave gave me a call and said he had work,” recalled a Manila-based former U.S. Navy sailor who, after leaving the service, had worked for the same contractor as Smith in Iraq. “He said there’s this South African guy, he’s got a shitload of money and he wants to do all sorts of crazy shit. He’s got businesses all over the place and he also mines gold. He said what he wanted to do was move some of his gold from a mine in Zimbabwe, and then get it to the Philippines and hopefully to Hong Kong to sell it to some rich buyers. I’m like, okay.” The American met with Smith and Le Roux at the Mandarin Oriental hotel in Makati the next evening. “He asked a few questions, my background, did I like traveling,” the contractor said. “The next day Dave said, ‘You’re in. You’ll be on retainer and paid this much. You’ll be on call with forty-eight hours’ lead time, meaning you need to be on a plane forty-eight hours later.’ ”
Many of these recruits knew little or nothing about Le Roux or his business. Often they never met him at all, receiving instructions through Smith. Some knew the organization they were working for by the name of one of Le Roux’s shell companies—Southern Ace or La Plata Trading—while others were hired by Echelon Associates, a security company that served as a front for Smith’s teams. Most referred to their employer simply as “The Company.” When they did encounter the boss, it was often under another identity. Le Roux had a fake Zimbabwean birth certificate and passport under the name John Bernard Bowlins, and another for a Johan William Smit. Still another birth certificate listed his identity as William Vaughn. Some people called him Benny, others Johan, John, or just Boss.
“I was forwarded an email from a friend that was working in Iraq,” a South African contractor named Marcus said. “They were looking for snipers and close-protection personnel. I sent my CV and was flown to Manila a week later. When I corresponded with him in the beginning, he used the name Alexander. When I met him, he introduced himself as John. I heard Filipinos talk about ‘Boss Paul.’ But then again, we all used pseudonyms in the Philippines.”
Among the handful of Americans sometimes paired with McConnell was a former U.S. Army soldier, Tim Vamvakias. Like many of the recruits, he had spent time in private contracting, in his case as a dog handler in the Helmand province of Afghanistan, embedded with a unit from the U.S. Army’s 3rd Special Forces Group. When his diabetes flared up, the company had terminated him. Unemployed and temporarily homeless, he’d joined Le Roux’s organization in 2008, connected through his former colleague, an Irish ex-soldier named John O’Donoghue. “He said he had some ‘off the grid’ and ‘covert’ security opportunities for me,” Vamvakias said. “I was to update my open waters diving license and meet him in the Philippines for further info.” After he was settled in, Vamvakias met with Smith in Manila, who told him they were providing security for an Internet mogul. “As far as I knew at the time it was a new security wing that was being formed,” Vamvakias said, “comprised mostly of ex–Special Ops guys with combat experience ranging from U.S. Special Forces, British SAS, as well as ex–French Foreign Legion soldiers.”
Vamvakias, in turn, recruited his friend Joseph Hunter, a decorated U.S. Army vet with the hulking body of an ultimate fighter. Vamvakias and Hunter had served in the military together for several years in the 1990s. Now, in 2008, they were both working under Dave Smith in the employ of Paul Le Roux.
In Manila, Smith often doled out salaries to the mercenaries in cash from his Infiniti SUV. “Everybody he had to pay had to come to the car, open the trunk,” Klaussen said. “Put it in the brown paper bag, there you go. It was mental.” The crews crisscrossed continents, from Vietnam to Ghana to Zambia to South Africa. One day they might be protecting a Le Roux employee who had arrived in Kinshasa carrying a duffel bag full of American cash; the next they might be crossing a border in a pickup with millions of dollars in gold hidden in the tailgate, on their way to a remote airstrip. A week later they could be in Malaysia, conducting surveillance on a wealthy executive. Le Roux’s businesses seemed at times to be independent arms of some conglomerate larger than them all. He’d purchased timber concessions in Africa and Asia and deployed employees to supervise logging operations: teak logs out of the Democratic Republic of Congo, sold through La Plata Trading; tali logs in the neighboring Republic of the Congo under the banner of Martenius Trading.
Most of the men on the ground had little idea what it all added up to. “You have to understand: things were very compartmentalized,” the American former sailor said. “There were times, many times, that one person would not know what the other was doing. To the point that you had no idea how many people are working on this particular contract, let alone that the person you are traveling with might have no idea what his particular mission was.” It was a testament to Le Roux’s penchant for secrecy in his businesses that Klaussen and McConnell, despite occupying roughly equivalent positions in the operation, never so much as met. There was only one person who maintained a picture of the entire operation in his head, and that was Paul Le Roux.