Crime & Public Safety

Locals know Hilton Head’s past as a ‘gentlemen smugglers’ pot pipeline. Now the world might, too

Meet the Lowcountry's gentlemen smugglers – a mini-trailer

Watch an abbreviated trailer produced by Charleston's Black Bear Studios of kingpins Barry "Flash" Foy and Les Riley as they are introduced for "The Gentlemen Smugglers" a documentary based on the Operation Jackpot drug-smuggling story.
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Watch an abbreviated trailer produced by Charleston's Black Bear Studios of kingpins Barry "Flash" Foy and Les Riley as they are introduced for "The Gentlemen Smugglers" a documentary based on the Operation Jackpot drug-smuggling story.

Consider it one of the more comic scenes in an $850 million drug-smuggling saga that rocked the South Carolina Lowcountry in the early 1980s.

A trusted neighbor is on top of a 20-foot ladder in his back yard on Calibogue Cay. It’s a quiet, dark street where residents of one of Hilton Head Island’s most coveted addresses are dazzled by sunsets that silhouette docks reaching into Calibogue Sound.

On this autumn day in 1980, the neighbor, Wallace E. “Wally” Butler Jr. — a successful real estate agent and former Sea Pines vice president — is hanging netting from one tree to another.

Somehow it would keep neighbors from peering in on the comings and goings of a new group that also coveted that address.

They would use a dock there to unload 24,000 pounds of marijuana in three separate shipments by sailboat.

Butler, then in his late 40s, was not a willing participant at first.

Maybe he was lured by the quick money — up to $100,000 a pop for providing an off-load site, something he did more than half a dozen times between Calibogue Cay and an abandoned oyster factory on remote property he had listed for sale along Sawmill Creek near Bluffton.

Maybe it was the adrenalin rush for an excitable guy who was always in motion after kicking alcohol and turning to coffee and cigarettes.

Whatever it was, his story was like a lot of others. Almost 200 people, all but a couple of them with no prior criminal record, were swept into a mighty rush of cash, marijuana and hashish that crash landed with indictments and jail time for many of them in a legendary twist of Lowcountry lore called “Operation Jackpot.”

They also were swept into a trailblazing federal investigation that resulted in more than 100 convictions and launched the public career of a young U.S. attorney, today’s South Carolina Gov. Henry Dargan McMaster.

The kingpins were from good families, earning the name “gentlemen smugglers” because they never used violence in their murky trade, and never trafficked in hard drugs. They thumbed their noses at a straight-laced life, and they were millionaires in their 20s.

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The story — with people taping $50,000 to their bodies for delivery to a bank in the Bahamas, or bagging $1.8 million in musty bills in a Hilton Head hotel room, or sailing across the Atlantic with a broken main boom and 30,000 pounds of hash picked up in war-torn Beirut on board — will be coming to a big screen near you soon, if a Charleston studio gets its way.

A 2011 book, “Jackpot: High Times, High Seas and the Sting That Launched the War on Drugs,” by former Beaufort Gazette reporter Jason Ryan is the basis for the screenplay.

Then U.S. Attorney Henry Dargan McMaster at a news conference showing cash confiscated in the Operation Jackpot investigation in the early 1980s. Only the Best :-)) Courtesy of Jason Ryan

He tells about those nail-biting days when a load of dope arrived on quiet Calibogue Cay.

He tells that Robert Leslie “Les” Riley, who was one of the largest of the kingpins and also had a home on Calibogue Cay, “fed a neighbor’s dog a hamburger patty stuffed with Quaaludes to prevent him from barking at any activity in the night.”

As the day faded to dark, men gathered inside Butler’s home. There was friendly chit chat, but they did not always introduce themselves or share names. The action started after sunset when word came by radio that a boat crammed with pot was headed in.

A lookout would go into the woods with a walkie-talkie. Decoy boats took their places in Calibogue Sound.

In the living room, a lieutenant from an island fire department monitored a radio, keeping an ear on law enforcement. He would tell a judge later that Butler paid him $5,000 in cash from a drawer in a desk at his real estate office.

“Others tended to the vehicles parked in the backyard and garage, taping ready-made custom patches of cardboard and duct tape over the brake and taillights, allowing them to maneuver the cars in complete darkness,” Ryan wrote. “Parking the cars by the dock, they’d open the doors and load each vehicle with as much pot as it could hold, emptying the sailboat as they marched through the night, bales on their shoulders, like ants bringing food home to their mounds.”

It then roared up the highway — and went up in smoke — to satisfy America’s insatiable hunger for pot.

‘Perfect places for smugglers’

The weed came from Colombia or Jamaica, and the hash was from Lebanon, but most of the smugglers were homegrown.

Kingpin Barry “Flash” Foy of Charleston was a Columbia boy. He had scrapes with the law early in life and ended up learning the smuggling trade in Florida. He said when things got crowded down there, he landed on Hilton Head, invited by his friend and fellow smuggler Les Riley, who also grew up in Columbia.

“We laundered a lot of money,” Foy, now 67, told The Island Packet and The Beaufort Gazette in a recent interview. “Millions. Plural. Tens of millions.”

barry foy
A young Barry Foy. Only the Best :-)) Courtesy of Jason Ryan

For the kingpins, that meant parties, women, Lear jets, luxury cars, yachts and oceanfront homes.

Others could get $10,000 for serving as a lookout or a decoy, $10,000 to $50,000 to help unload a boat, $250,000 for lending out a trawler for a night. A boat captain and crew could earn $400,000.

Other smugglers also showed up on Hilton Head. And with an army of local recruits, boats full of drugs were soon sneaking through the rowdy tides of a South Carolina coastline that had protected pirates and rum-runners before them. They delivered loads of pot or hash to McClellanville, and Edisto, St. Helena, Dataw and Pine islands.

“Hilton Head had a lot of advantages,” Foy said. “It had a lot of perfect places for smugglers. It had docks. It was remote in a sense. It had easy access to the ocean. It was a cool place.”

Prosecutors said that smuggling “rings” led by Riley and Foy imported 347,000 pounds of marijuana and 130,000 pounds of hashish. They also made cases involving two other “rings.”

So much pot was flowing that bales sometimes washed ashore, or bobbed around offshore. Locals called them “square grouper.”

High times

Beaufort County was awash in rumors, as the smuggling stretched from 1973 to 1983.

“The gentlemen smugglers were the epitome of an overindulgent lifestyle,” Ryan wrote.

“The smugglers bought fur coats, cashmere clothing, and thick gold chains ...

“They ordered the most expensive bottles of wine and champagne when dining out, but not necessarily the best. Sometimes they dined in, ordering one of everything on the room service menus. One smuggler was said to have taken a date aboard the Concorde jet to Paris for dinner, then jetted back home that same night, just because they could.”

Les Riley, left, and Barry Foy during a Hilton Head Island fishing tournament. Courtesy of Jason Ryan

Foy had an oceanfront home at the end of Mallard Road in North Forest Beach.

“We partied every night,” he said in his recent interview. “How could you not?”

So many smugglers were living near Foy’s place that Butler labeled it “DDOA, or Drug Dealers of America,” Ryan wrote.

Riley retired at one point and had a young family — enjoying Hilton Head’s fishing, Montessori school, bike paths and Tiki Hut bar — before being pulled back into the trade, Ryan wrote.

“The babies needed shoes, who knows?” Foy said in his recent interview. “There was always some reason to keep the ball rolling.”

Ironically, the money that drove the show ended up killing it. With more money, it was harder to keep everybody happy, Ryan said in a recent interview. And it was a logistical challenge: What do you do when your closet it literally full of cash? How do you keep from creating paper trails when you buy stuff or invest it?

The trail of money — and one person testifying against another within the chain of a drug ring — did them in.

Following the money

President Ronald Reagan had just sounded a battle whoop for the “War on Drugs” when he appointed McMaster the U.S. attorney in 1981.

McMaster insisted on an aggressive fight against drug smuggling, not knowing that some of the defendants would turn out to be people he knew growing up, or at the University of South Carolina.

Young Henry Dargan McMaster with President Ronald Reagan, who appointed him U.S. Attorney in 1981 at the recommendation of Sen. Strom Thurmond. McMaster coordinated the Operation Jackpot investigation and prosecution, with an investigative task force formally formed in 1982. Gov. Henry McMaster’s web page

Soon after McMaster was appointed, veteran Internal Revenue Service investigator Brian Wellesley told him about a different approach to cracking tough cases: a task force of investigators from a variety of federal agencies dropping their normal tasks and working together.

Instead of looking for boats full of dope in a dark marsh, they would search for evidence of tax evasion, racketeering or currency violations.

McMaster made the task force happen. It started with two agents: Claude McDonald of U.S. Customs and David Forbes of the IRS.

They knew something was going on, but had no clue about who, when or where.

Two hunches paid off. They figured the smugglers had to be South Carolinians who lived on the coastline that they would need to know so well. And they had a hunch that the top smugglers would be buying nice things with cash, and living well.

They came to Hilton Head.

It started with cold calls on real estate agents and luxury car dealers, asking who was paying cash.

They finally got a “yes” on a land purchase. They pored over records in the county courthouse and discovered a pattern of land purchases on Hilton Head under the names of two offshore corporations, and often with the same attorney and real estate agent.

Enough pieces of the puzzle came together to get a search warrant for the lawyer’s office. Within hours he agreed to cooperate and opened the books, investigators told Ryan.

Evidence took investigators to banks in the Bahamas and off the shores of Normandy.

“They looked for substantial wealth with no apparent source of income,” said Bart Daniel, who devoted 3 1/2 years of his life to Operation Jackpot as an assistant U.S. attorney under McMaster, in a recent interview with the Packet and Gazette.

“Hilton Head broke it,” said Daniel, who would later become the U.S. attorney for South Carolina. “We followed the money, boats and assets all over the world.”

‘Hated to leave’

Investigators also did some mucky gum shoe work in the Lowcountry.

Two telephone numbers scribbled on a piece of paper found in a sunken sailboat led them to a dock builder, which led them to an extra-large dock built on Calibogue Cay, and the name Les Riley.

Ryan tells in his book that the FBI’s David Forbes would say: “I had a tiger by the tail and I said, ‘I ain’t turning this thing loose. I got something here. I ain’t too sure what, but I got it.’”

The Jackpot task force grew to 17 agents and included the FBI, U.S. Drug Enforcement Agency and the State Law Enforcement Division.

The Operation Jackpot task force in front of the U.S. attorney’s office in Columbia. From left, Dewey Greager (DEA), Mark Goodwin (FBI), U.S. Attorney Henry Dargan McMaster, Mike Lemnah (U.S. Customs Patrol), Brian Tim Wellesley (IRS), Claude McDonald (U.S. Customs), and David Forbes (IRS). Courtesy of Jason Ryan

They dived into another cutting-edge approach: civil asset forfeiture. Jackpot was one of the first cases in which the alleged gains of illegal drug trafficking were seized before the owners had been convicted.

They turned a lot of heads when they seized the classy 82 Queen restaurant in downtown Charleston, in a building then partly owned by Foy.

They also seized a lot of property on Hilton Head, boats, cars, jewelry, cash, a certificate of deposit — even a collection of Tiffany vases that made the cover of a Sotheby’s auction catalog. They raked in some $15 million, most of it going to the federal treasury and some of it paying for rewards for South Carolina CrimeStoppers tips.

From Wally Butler, the government took at least two lots in Spanish Wells Plantation, one lot in Forest Beach (in the Palm Forest subdivision), and a custom-built 36-foot sport fishing boat named “The Last Scene.”

“Once we hit them in the pocketbook, it dried up the ‘gentlemen smugglers’ along the South Carolina coast,” said Daniel, now a private defense attorney in Charleston.

“We kind of got run out of Hilton Head,” Foy said. “I sold all my property immediately and was out there. I hated to leave Hilton Head, but I had to.”

Heartbroken home folks

Operation Jackpot stunned Beaufort County.

It was less the magnitude of the smuggling than the large number of people named in a series of federal indictments as mother lodes of names were dumped on the public. Some of the people represented the best of local families.

Almost 200 people were charged, including lawyers, the son of a state legislator and a state wildlife officer dubbed the “Masked Marvel” for allegedly wearing a ski mask as he aided smugglers while on patrol.

“For some, it was totally out of character,” said Daniel.

Most of them were convicted and spent time in jail.

Ryan told the Packet and Gazette recently that if there were victims of the crimes, it was the families of the defendants.

Daniel recalls seeing parents and grandparents in court. “It was heartbreaking, just heartbreaking,” he said.

Many of the convicted have reconstructed professional lives after doing their time, and Daniel said he admires them. Some are still scorned caustically by the kingpins for ratting on others.

les riley
A young Les Riley. Only the Best :-)) Courtesy of Jason Ryan

Riley refused to name names to authorities, and he served extra time for it.

Defense attorneys protested that the the government bought testimony by scaring defendants about life in prison or promising them lesser sentences if they spilled the beans. And attorneys protested that the only evidence Daniel had in many cases was the testimony of admitted crooks telling what supposedly happened six, eight or nine years earlier.

Daniel would respond that he was sorry, but no nuns were in on the smuggling ventures.

Hide and seek

Some of the smugglers fled before they were indicted.

Riley and Butler skipped to Australia and were living in an upscale suburb of Sydney when they were nabbed. Riley tried to run, but didn’t get far. Butler was fishing when he was caught. They were jailed there for more than two years as they fought extradition.

Riley spent 17 years behind bars while a couple of his young children grew up without him at home. Foy said Riley today lives on Fripp Island, and they talk regularly.

Butler was indicted as a kingpin, and his name was splashed endlessly in the newspapers as a mastermind behind hundreds of millions of dollars worth of drugs. But he really wasn’t, and a court agreed.

The kingpin charge was later dropped. He was sentenced to 20 years on lesser charges, but served less than three years in prison, then rebuilt his life in Beaufort County. In a 1992 story in The Island Packet, he talked about his passion for nature. He lived a quiet life before passing away in 2006 at age 74.

One of many “Wanted” posters for Operation Jackpot suspects.

Foy also went on the lam.

Ryan’s book tells how IRS agent Forbes chased Foy around the country for six months before apprehending him in March 1985. Foy was wearing a mink coat when he was caught with his wife and young children on a plane that had just landed in New York City from a ski trip.

“As the metal (handcuff) clasps swung shut and clicked,” Ryan wrote, “Foy’s 15-year career as a drug smuggler was over. He was three days short of his 34th birthday.”

Foy served more than 10 years in the federal penitentiary in Atlanta. In his interview with the Packet and Gazette, he said he always asked for a street view.

“We would watch the hookers out the window,” he recalled. “We had names for them.”

No remorse

Butler was among many defendants who apologized to the court, expressing great remorse.

But it was not so for everyone. And boosted by today’s changing view of the “War on Drugs” and the legality of marijuana, several Jackpot defendants who spent a lot of time in jail say today they did nothing wrong.

They’re speaking out in a documentary film by Black Bear Studios in Charleston. It’s based on Ryan’s book and called “The Gentlemen Smugglers.”

The opening keyframe to “The Gentlemen Smugglers,” the documentary by Black Bear Studios. Black Bear Studios

In a trailer for the documentary, which is not yet funded, Riley says: “We certainly would not break in a house or steal a car. I didn’t think marijuana was anything except for having a good time and getting hungry.”

Cleveland “Skip” Sanders, who grew up in Beaufort and served four years after being convicted in 1984, says: “I don’t feel like we were really doing anything detrimental. We were breaking the law, but so is jaywalking. You going to lock me up for 10 years for that too?”

Asked if he felt like he did anything wrong, Foy, who is also in the documentary trailer, told the Packet and Gazette emphatically in a rumbling bass voice, “Hail no.”

“If you look back on it now,” Foy continued, “we already knew what people know today. We weren’t doing anything wrong. People were beating the doors down to get more of it. Nobody was holding a gun to anyone’s head to make them buy pot.

“The government has had such an intense campaign, all the way back to the ’30s and the movie ‘Reefer Madness,’ and it never stopped. But, believe me, pot has been helping people for a long time. They can sleep better, or be in less pain. And now you see that it’s legal in a lot of places.”

Asked if it bothered him that a lot of people’s lives were hurt in the smuggling operation, Foy boomed, “Hail no.”

“They were all 21 and over,” he said. “Nobody ever made anybody do anything.”

David Lauderdale: 843-706-8115, @ThatsLauderdale