Kiwi spills tale of drug lords, crooked deals and death

Keith Bulfin, a Kiwi who worked for the DEA in Mexico. Photo / Supplied

The day Keith Bulfin's colleague was shot dead in a Mexico City hotel room, he had been telling Bulfin about the torture techniques the pair may have had to endure if the drug cartels picked them up.

Would it be sticking their heads in a box with a hungry mouse or strapping them naked on to a block of ice until they screamed in agony?

That question would never be answered. Hours later, the United States Drug Enforcement Administration (DEA) agent and two drug dealers, one Mexican, one Colombian, were dead and Bulfin was fleeing for the US border carrying a suitcase with US$10 million.

Bulfin had gone to the hotel with the agent for a high-stakes business meeting with the drug dealers who wanted Bulfin to launder their profits through international bank accounts. Little did they know Bulfin was masquerading as a banker but really working undercover for the DEA. His cover was blown when the Colombian dealer recognised the agent and the meeting ended in a bloody shoot-out. Leaving his dead mate with a gaping hole in his neck, Bulfin went on the run, hauling a wounded Colombian who had been shot in the stomach. The DEA wanted him captured alive.

Bulfin's daring escape and the story of how a country boy from South Otago ended up contracted to the DEA is in Bulfin's book, Undercover. The book has the tag line, "a novel of a life", and seems almost too sensational to be true. But Bulfin insists the bulk of it is fact. Names and details have been changed to protect people and the sensitivity of US covert operations.

Isn't he concerned for his safety? "I'm not worried because the people I dealt with are dead or in jail," says Bulfin, now at home in Melbourne.

Bulfin was born in 1946. He grew up in Milton, where his father ran the bus service between Lawrence and Dunedin. His early education was at the two-room Waitahuna Primary where there were just four girls and two boys in his class. When he was 15, Bulfin was sent to board at Waitaki Boys' High School in Oamaru. He was bullied and beaten.

"If someone was getting thumped I'd stand back and not get involved. I was maybe a wimp in that regard. I didn't stand up to protect others," says Bulfin.

The shame of feeling cowardly is a theme that recurs throughout Bulfin's book. He says writing it was a way of standing up for himself. Bulfin excelled at sport and that earned him his ticket out of New Zealand. In 1968, aged 21, he was invited to move to Melbourne by an athletics club to train for the Australian Athletics Championships. He also played and coached rugby and has had a lifelong involvement with the sport. He still cheers for New Zealand, despite living offshore for more than 40 years.

Bulfin started a career in finance in parallel with his sporting career. He worked in South Africa and Papua New Guinea then settled back in Melbourne. By the mid-1980s he was flying high as an associate partner of sharebrokers McKinley, Wilson and Co and was happily married with three children. Then his world came crashing down.

The Victorian Fraud Squad swooped on Bulfin for his part in a mortgage deal for Dreamworld theme park in Queensland. He pleaded guilty to fraud-related charges involving more than $280 million and receiving $1.89 million in secret commissions, and in 1997 was jailed for a minimum of two years. On appeal, the sentence was increased to a minimum of three years.

The paper trail of the case gives a glimpse of Bulfin's financial skills and why the US authorities were so keen to recruit him to work undercover. He filtered $1 million through a company registered in Liberia and Luxembourg to accounts with Westpac, the National Bank and Societe General, ending up in personal accounts at ANZ and the Royal Bank of Scotland.

Bulfin later performed such financial gymnastics for the cartels.

The Mexican drug trade is estimated to be worth $65 billion a year and is controlled by five families. ``Those are colossal profits and they have to park them somewhere,'' says Bulfin. ``Even though they may go to Mexico City and deal with bankers they are always looking for new opportunities.''

Bulfin's recommendation came from his time in prison and he is convinced he was the victim of a government set-up. Despite being a low-risk, white-collar criminal, Bulfin was sent to the maximum security Sirius East unit in Melbourne's Port Phillip Prison. He spent two years and seven months with murderers, rapists, arsonists and two Mexican fugitives.

On his release in late 2000, Bulfin was 54 and his credibility was shot. The immigration department was threatening him with deportation and a business associate was out for revenge in the most violent manner, car bombing his home and intimidating his family.

But he had a friendship with the Mexican inmates, and that was currency with the DEA. They approached him to set up an investment bank in San Diego that would be a lure for Mexican drug money and ultimately a way to break the cartels. In return, Bulfin was promised a rehabilitated reputation, a green card and a position at a New York financial bank. It seemed too good to be true.

Bulfin packed his bags for San Diego. Once there, he discovered how naive he had been. Instead of processing money, the job entailed regular trips to Mexico to deal with the most violent criminals.

"These people are ruthless beyond comprehension," says Bulfin. "They will decapitate people for a simple statement and hang the body over a bridge coming out of Tijuana."

The scale of the violent world he was dealing with was demonstrated by the welcome wagon that greeted Bulfin at Mexico City airport. When he was picked up by the son of a cartel boss he was ushered into a high-security convoy that would rival a presidential visit. Bulfin travelled in a van with the son, a driver and four bodyguards in suits bearing semi-automatic weapons.

"When I hopped into that scenario and saw the weapons I was trembling with fear because on that occasion I did have a taping device," he says. The recorder was disguised to look like a set of keys and was never discovered.

Bulfin came to a terrifying realisation on his second or third trip. "It dawned on me then as a New Zealander if I was caught laundering money in Mexico, the DEA would decide, `He doesn't work for us'."

Bulfin likens working for the DEA to a game of chess. He was constantly trying to stay one move ahead. As he played out potential scenarios in his head he would run through the repercussions for his family and friends. "I was disposable and they [the DEA] would deny I even existed," says Bulfin. To make matters worse, details of Bulfin's activities were leaked to the Mexicans, putting his family's lives in danger. Concerned about what would happen if he did find his life threatened, Bulfin went to the New Zealand embassy in Mexico City to test whether they would help. He was told to go to the American Embassy. Bulfin bypassed the 1.5km queue of Mexicans out front and went to a side gate, where he argued with the US Marine guard for 40 minutes, asking to urgently see the DEA attache.

The unsuccessful dummy run proved one thing to Bulfin. If the cartels had really been out for blood that day, he would be dead. Bulfin knew he would have to rely on his own smarts. When Bulfin approached Random House with his story he was greeted by scepticism _ understandably, considering they have borne the brunt of literary hoaxes in the past. But Bulfin was able to supply tapes, letters and documentation verifying his tale and details of his story to check out.

While in Mexico, he opened a chain of fish and chip restaurants as a cover. In the book he calls it Otago Bay Restaurant. In reality, they were called KB Chips, short for Kiwi's Best. The first one opened in Los Cabos in 2002 and after Bulfin finished working for the DEA he considered continuing them as a legitimate business. He even opened a franchise in Rotorua in late 2004.

But one afternoon in early 2005 his cellphone rang. A deep husky voice said: "I understand you are expanding the restaurants. Just make sure our equity is covered."

Restaurants are prime businesses for laundering money. Bulfin dropped the idea immediately.

This financier's Mexican days are over. He says he will never return. "I'd be executed," he says bluntly. His association with US law enforcement agencies is also in his past but if he came across a cartel or a covert government agency again, he knows which one he would trust.

"I hope I never meet anyone from a Mexican drug cartel but if he came in and said, 'These are the options', I know I could trust him," says Bulfin. "The agencies lie and cheat. They're never going to have your back."

Until now, Bulfin has been a reluctant storyteller. He would tell his mother in Christchurch the same thing he told everyone else - that he worked for an investment bank in San Diego.

Bulfin approached the New Zealand Film Commission, which put him in touch with local production companies. He has signed with Emma Slade of Showdown Productions and Australian-based New Holland Pictures and work is under way to produce a film of his escapades. Slade says they are working on a co-production with Denmark and Canada and are on the hunt for an A-list director to helm the project.

The location and scope of the story lends itself to a big US film studio but Bulfin is determined the film is driven by New Zealanders. "Because of Keith's experience of working in America, he's gun-shy working with them in any sort of capacity," says Slade.

Slade has been working on the project for more than a year and has independently investigated Bulfin's tale. She attributes his survival, in part, to Kiwi ingenuity and describes him as "charming, sophisticated, polite and very, very smart".

And there will be more to come. Bulfin is working on his second book, about a period working for the FBI in Washington which came after his Mexican adventures, and a third project is in the works.

What is extraordinary, Slade says, is that Bulfin is such a fish out of water. ``This is a little Kiwi boy who ended up working for a cartel.''

Undercover - A Novel of a Life by Keith Bulfin
(Random House, RRP $39.99) will be in book stores from Friday.