There is little about Alderwood Avenue to suggest that a new battle to control Europe's cocaine trade began in this grim corner of the tough Liverpool suburb of Speke. Only the most inquisitive visitor might, among the boarded-up windows and steel-shuttered shops, pause to inspect the unprepossessing gymnasium where the local hard-nuts once met.
How Liverpool docks became a hub of Europe's deadly cocaine tradeMark Townsend
A new generation of ruthless gangsters is emerging in the city at the heart of Britain's cocaine trade,
and they are talking to the merciless Latin American paymasters of the global business
It was here that, just after 8pm on 13 November 2007, local father Colin Smith stepped outside and was executed with a pump-action shotgun. Smith, a balding 40-year-old who drove a Ford Galaxy and wore faded Lacoste shirts, was no ordinary resident of Speke. He was known as the "Cocaine King", the second biggest drug dealer Britain has produced, and an ally of Curtis Warren, the only trafficker to appear in the Sunday Times Rich List and currently behind bars in Jersey.
Smith had amassed a personal fortune of at least £200m as he masterminded the distribution of cocaine across Europe using direct contacts with the South American cartels. His murder triggered shockwaves throughout the international cocaine networks, tremors that continue to destabilise the global narcotics trade.
No one has been charged with Smith's execution, but details of the ongoing murder investigation reveal a narrative of gangland betrayal, retribution and a murderous power-struggle that spans three continents.
In the months before his murder, police and underworld sources say Smith became embroiled in a "disrespect" dispute with prominent figures from the boxing community.
Usually, when things "got hot" Smith sought refuge in the gym on Alderwood Avenue. It was no ordinary gym. Police believe that, at the time, it was the HQ of the Liverpool mafia, the operations room for Britain's biggest international cocaine smuggling ring. Its location in the bleak Speke backstreets was no coincidence either. John Lennon Airport is five minutes walk away. Smith's footsoldiers were constantly riding the budget carriers that roar overhead as they passed orders across the continent without ever needing to phone. "It's called Easygraft," said one gangland member.
A police source said: "The gym was their controlled talking shop, run by their security. It served the same function as the boardroom of a multinational company with Smith its chief exec."
When Smith arrived at the safe house that November night, he had no idea that close associates, including one gangland figure known only as "the Bird of Prey", had decided the Cocaine King's reign was over. His murder, according to police, was a "hostile takeover". The consequences of that takeover are now causing consternation among police and drug enforcement agencies: a new generation of Liverpool gangsters – ruthless, brazen and extremely violent – had spied a business opportunity in Mexico.
Over the past 12 months, the brutal, macabre methods of the Mexican drugs cartels have made regular headlines. In cities like Ciudad Juárez, even the arrival of the army has failed to halt the relentless expansionism of groups such as the Sinaloa cartel and Los Zetas, which have now achieved a dark hegemony over the Latin American illegal drugs trade.
According to Neil Giles, deputy director of the Serious Organised Crime Agency (Soca), "the Mexicans are now so violent, so scary, that the Colombians are literally in thrall. They have to continue to supply the Mexicans any way they can." But the cartels appear to be looking for new routes.
Mexican counter-narcotics officials say recent offensives by the army to crack down on the influx of cocaine north into the US have prompted the Sinaloa cartel and Los Zetas to seek fresh markets, scouring Europe for like-minded individuals willing to assist a global expansion. According to intelligence reports on both sides of the Atlantic, Liverpool may be target number one. The huge volume of container shipping that makes the Mersey one of the busiest thoroughfares in the world is a gift to a sophisticated drug-smuggling organisation.
"The Mexicans are shifting their operations. Mainly the cartels are beginning to traffic to the UK, but also Spain. The cocaine is in containers and the main port of entry is Liverpool," said one Mexican official.
The dialogue with Smith's killers has already started, police believe. Liverpool gangsters, including the Bird of Prey and an accomplice, James Taylor, known as "Pancake", are "certainly talking" to the Sinaloa, along with Los Zetas, classified by the US Drug Enforcement Administration as Mexico's most dangerous trafficking organisation. Los Zetas control access to the Venezuelan ports from where cocaine almost certainly has already been dispatched direct to Liverpool. With menacing understatement, Liverpool police told the Observer that the issue of Mexican cartels targeting the largest enclosed dock system in the world is a "highly evolving" situation.
For the Bird of Prey, Pancake and their associates, the emerging Mexican connection follows a calamitous Spanish failure. In the aftermath of Colin Smith's murder, the new leaders of the Liverpool mafia flew to the Costa del Sol with the intention of laying down the law and inheriting one of the most lucrative cocaine-smuggling operations in the world. In Marbella, the successors to the Cocaine King were not welcomed.
Attempts to wrest control of Smith's connections in Spain ran up against a wall of silence and disdain. The newcomers were ostracised by the country's well-established nexus of cocaine brokers and middlemen – Colombian, Spanish and Scouse.
Smith's middlemen, it was clear, were not interested. And there was open conflict with a shadowy group of former IRA paramilitaries turned contract-killers called the "Cleaners", believed to be responsible for more than 20 drug-related assassinations around Merseyside. In a summer-long feud in 2008, several members of the Cleaners were murdered.
One spat with the Irish took place in the Nikki Beach Bar in Marbella when drinkers hurled themselves to the floor at the sound of breaking glass, followed by gunshots. A leaked report to a Spanish judge later claimed the Bird of Prey and Pancake belonged to a "worldwide organisation that is dedicated mainly to drug trafficking and targeted assassinations."
It was becoming clear that the Spanish route, gaining access to the influx of South American cocaine that came via west Africa, had been closed off. Or at least it could only be reopened at prohibitive cost.
Giles, of Soca, said: "As a cocaine trafficker, you get most money if you control the consignment from production to market. If you go through a lot of middlemen, the take goes down"
The old routes were, in any case, becoming hugely more difficult to smuggle through. The Spanish police and the growing success of Soca in interdicting cocaine shipments moving through Iberia was already causing alarm and rethinking in Bogotá and Caracas.
Soca is still upgrading its anti-narcotics efforts throughout Africa. Giles spent last week in Ghana telling authorities to "beware of Latin Americans bearing gifts".
Police believe the Bird of Prey and Taylor eventually returned to Merseyside last year, convinced their plan must somehow circumvent Spain and determined to explore a possibility that, before he was murdered, Smith himself had started to contemplate. The idea was to open up a direct connection with the Mexicans.
Underworld sources confirmed to the Observer that, shortly before he was murdered, Smith was holding high-level talks with the Sinaloa and Zeta cartels. He had encountered difficulties with Colombia's Cali-based cartel and had begun to woo new clients in the lawless north of Mexico. Chastened by the experience in Spain, his successors decided to pursue the same connections.
"Smith's partner [the Bird of Prey] is the only person who has the money and know-how to work with them," said a gangland source.
Proposals were hatched earlier this year to bring cocaine direct into Liverpool. According to sources in both the police and the Liverpool underworld, the Bird of Prey, Taylor and their associates have the audacity, cunning and determination to forge an entirely new departure in the European cocaine business: one which will be far more violent than previous generations of gangs.
Pancake is described as a fearsome individual, typifying a new generation of thug who has made the big time, and operates in a fashion poles apart from the methodical dealings of Smith. His emerging position in the city's cocaine trade is the first time one of the so-called "Soljas" – the hooded scallies of the sink estates – has reached the summit of the Liverpool mafia food-chain.
According to one former Liverpool gangster, "Smith was old-school. His word mattered, payments were upfront and on time. The Pancake has no social skills, he is seen as violent and unpredictable, more interested in shooting than making serious money.
"They are heavily armed, they plant homemade bombs outside pubs. If the Mexicans are doing business in Liverpool, they have met their match."
Liverpool is a place where all roads feel like they head to the banks of the Mersey, the brown plume of water that is the city's lifeblood. From the waterfront, Merseyside's famous docks stretch north for 10 kilometres, eventually swallowed by the haze above Crosby.
Perhaps it is no surprise that the river that shaped a city should also mould its criminality. One police source said: "Dockers walked off with whatever came in on the ships and this evolved in the 1970s and 1980s."
In 1983, heroin began flooding Britain through Merseyside's vast dockside. Now, only the product changes. The Port of Liverpool handles 623,380 containers a year. Around 171,000 – 468 a day – of the 20ft units hail from destinations such as South America, China and india. Security is provided by a 30-strong team of port police supplemented with around 15 customs officers, all of whom are security vetted.
Futile, according to one Mexican counter-narcotics official, who said simply: "The Sinaloa and Zeta cartel are using containers and you have no solution for that. Either you go through every container or you deal with the UK demand for cocaine." Giles confirms that storing cocaine in shipping containers is the cartels' favoured method of "bulk imports".
Their favoured method, he said, was intercepting target containers and "pulling out" the cocaine before they reached their legitimate destination. Amounts of between 250kg to 500kg were used to reduce risk in case they lost track of the cargo. A senior Merseyside Police source said: "Containers can just disappear – certainly it's easier than bringing it in on the coast using a speedboat".
So far, there have been no cocaine seizures in the Mersey docklands. But recently, Spanish authorities at the port of Valencia found 2,513kg of cocaine from Mexico inside containers. Police sources say its is highly possible the haul had a Liverpool connection.
In gangland Liverpool, the new edge of violence is widely acknowledged. CCTV footage taken from a Liverpool nightclub, Palm Sugar, reveals Pancake's penchant for aggression. Denied entry by a bouncer, images show him hurling a right-handed punch at the doorman's jaw. During the ensuing chaos, Taylor is seen hurling chairs at the nightclub's security as revellers scream in fear.
Within weeks of his return from Spain, Pancake was squabbling with Nicky Ayers, 46, a convicted Liverpudlian drug dealer. Two weeks ago Ayers, a well-known hardman, was assassinated outside his daughter's home in the West Derby district of Liverpool. Pancake was questioned by Merseyside Police, but not charged. The fallout of Smith's murder still hangs over Liverpool, most profoundly among the deprived streets that straddle the city's airport.
But the head of Merseyside Police's intelligence and security bureau, Detective Chief Superintendent Steve Naylor, who has charted the shifting loyalties in Liverpool's drugs gangs, is adamant they will snare Smith's killers.
Naylor said: "We have identified a number of disputes. Loyalties have changed. Any information will be treated with the strictest confidence."
In the meantime, the one certainty is that the cycle of killing will continue. The Mexicans are coming.
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