LAST ROUNDUP AT THE DKG

To the ranchers working their [grassy fields one spring day last year, the line of white, green and brown vehicles headed up Highway 377 toward Aubrey, Texas must have looked like a funeral procession. Things are usually pretty quiet in this little town north of Den-ton. The ranchers had no reason to suspect that the caravan of cars actually belonged to the U.S. government, or that they carried 42 agents from the Dallas office of the FBI and U.S. Drug Enforcement Administration and the U.S. Marshal’s Service in Tyler. But as the vehicles snaked their way off the main highway onto Cole Road, it became clear to the neighbors that the procession was not headed to any cemetery. It was moving toward the lavish DKG Appaloosa horse ranch owned and operated by Pee Wee Griffin, a wealthy one-time race car driver from Miami.

When the agents reached the ranch, they moved quickly and quietly into prearranged positions to secure it. James Barton, U.S. marshal for the Eastern District of Texas, led a party to the front door of the one-and-a-half-story brick and cedar ranchhouse.

There was no shooting and no one bolted for the back door. For Bruce Emery “Pee Wee” Griffin, this was just another in a series of unpleasant encounters with the law. He looked surprised, but he knew why the heat was at his door: They had come to take control of the DKG. When you make $300 million in drug dealing and use some of the money to fix up your ranch, then get busted and plead guilty, something strange happens to your property: It becomes “ill-gotten gains,” an old-fashioned term meaning that the feds can confiscate your land, your home, your car, anything you have.

And Pee Wee had plenty. On the ranch, federal agents found a 1981 Rolls-Royce Silver Spirit, a 1984 Lincoln Mark VII, two pickup trucks, a 1926 Ford Model T Truck, a pair of four-wheeled vehicles and a 1979 Mercedes-Benz 6.9. Inside the trunk of the Mercedes, investigators discovered nine gold bars valued at $2.5 million, $7,000 in U.S. currency, an 18-carat Grey Star Sapphire ring, dozens of diamond rings and two dozen or so loose diamonds ranging from one to six carats. Despite Pee Wee’s drug-dealing past, there were no narcotics found.

Pee Wee, who had been awaiting sentence, left home that day-March 14, 1984-as agents began a detailed search and inventory of every item on his ranch. He hasn’t been back since. His spread is now referred to as the DKG U.S. Government Ranch and is being temporarily run by a horse rancher from nearby Denton. To date, the government has spent more than $1 million to sustain the property and wage a battle in the federal courts to gain permanent ownership of the DKG.

Last June Pee Wee began serving a three-year sentence at a minimum security prison near Elgin Air Force Base in Florida. But being behind bars hasn’t prevented him from fighting back. From his cell he is continuing a legal battle to block the fed’s takeover of his $10-million horse-breeding DKG. Meanwhile, two of his three children are living in a motel in Pilot Point, five miles from the ranch, and attending high school there. Although the government is bent on maintaining control of the sprawling DKG, Pee Wee’s kids keep telling their friends that their dad is going to throw the biggest barbecue in Pilot Point history when he returns to live on the ranch. Ironically, although Pee Wee is an admitted international narcotics smuggler, many of the folks in Pilot Point still call him their friend, and some still feel the government is the real villain for taking his ranch.

“Pee Wee was very well-liked around here,” says Pat Hodges, a bartender at The Four Horseman Bar in Pilot Point. “In most small towns, people need a grace period before they warm up to you. But Pee Wee just overwhelmed people. He was a hard worker and he had a super personality. He bought from all the merchants in town and he hired all his help locally. He kept his money in the community.”

“Pee Wee didn’t look down on you like some of the other wealthy horse farmers,” says Wayne Crowsey, owner of City Lumber and Hardware Co., who did a substantial business with Griffin. “There’s leaders and there’s followers. Pee Wee was a leader. But I don’t believe in drugs. If he’s guilty like they say he is, then I think they ought to string him up.”



They’ve called the Aubrey area “Horse Country U.S.A.” ever since a Midwesterner named Dave Page took a ride about 35 miles to the north of Dallas one day back in 1970 and realized he’d found a gold mine splitting Texas Highway 377. The soft, sandy grasslands are perfect for raising horses, with rolling hills blanketed with grasses for grazing. The soil underneath is gentle on the tender hooves of horses valued sometimes at tens of thousands of dollars each. And the land, in those days, was cheap. Page also liked the fact that Aubrey seemed a perfect little country town, yet was close enough to the larger transportation centers of Dallas and Fort Worth.

Page’s hunch proved right. Today there are more than 100 horse-breeding ranches in or around Aubrey. In only 15 years, the area has become widely known for quarter horses, which are shown all over the world and known to draw an international crowd of buyers. Because of that notoriety, the locals weren’t surprised to see a Florida man like Pee Wee Griffin come to Aubrey in 1982 looking for a nice spread on which to breed Appaloosas. A year later he married his former babysitter, Donna Krauss, a horse lover from Florida who, insiders say, taught Pee Wee everything he knew about raising and breeding fine horses. Griffin, 20 years her senior, named the DKG after his new bride.

Pee Wee actually bought the DKG property on February 5,1982-less than two weeks before he was indicted in Miami on federal narcotics charges. He and his brother, Tim, purchased the first 50-acre tract through NABUC Ltd., a Bahamian corporation. (Agents noted later that NABUC is “Cuban” spelled backwards.) The price for the first 50 acres: a cool $1 million, which Pee Wee handed over in the form of a cashier’s check drawn on The Bank of Nova Scotia, Nassau, Bahamas. Not long after that, he purchased two other tracts from Emanuel “Pat” Pater-nostro through another of his brothers, Tony Griffin. According to investigators the payment for two tracts was also made in the form of a cashier’s check drawn on the same Bahamian bank.

The fact that Pee Wee paid cash for the anch raised a few eyebrows in Aubrey and ’ilot Point. But even in the most conser-ative of Baptist strongholds, folks don’t like o look a gift horse in the mouth. At least nat’s what current DKG Ranch foreman ’aul Aduddell is finding out.

“The man was very well-liked and he pent a lot of money around here,” says Aduddell. “He was your average good old boy. But they loved Griffin because he paid n cash. Everybody knew he made his money in dope, because he told everybody nat. When they took his ranch, a lot of peo-le just didn’t like what the government did. They liked this man. It’s hard not to like omebody you’re doing business with and naking money off of.”

Pee Wee remained popular in the Aubrey rea, even after his indictment on February 8, 1982. In the eight-count federal indict-nent, the government said that Pee Wee was he “supervisor and manager” of a drug muggling ring comprising race-car drivers, nechanics and owners who had imported over a million tons of marijuana and multi-kilo quantities of cocaine into the South Florida area between April 1976 and Febru-ry 1982. Although the feds confiscated an array of his automobiles, yachts, airplanes, peedboats and real estate in Miami, the government says Pee Wee’s Texas ranch re-nained a secret to authorities until 1984.



One of the things Pee Wee had going for him was the fact that he doesn’t look or act like a drug dealer. With his good-old-boy looks and gift of gab, he’d be the last person you’d pick out of a lineup o be a criminal. He looks like a 6-foot, 2-inch, 230-pound teddy bear. But to inves-igators who spent months following his business activities, Griffin was a notorious criminal caught ud in the violent international game of narcotics trafficking, a man whose adventures could easily be adapted to fit an episode of Miami Vice. He has told associates that he has hidden between $80 to $100 million of his estimated $300 million in drug profits in offshore bank accounts.

No one knows exactly how or when Pee Wee first became involved in smuggling large quantities of drugs into southern Florida. Investigators believe that in the Sixties he was already mixing small-scale drug dealing with his career as a race car driver. Pee Wee began racing in 1954 at age 16 on quarter-mile “short tracks” in the Miami area and became a champ at the Hialeah track while still a teenager. He went on to become a six-time champion at a track in East Windsor, New Jersey racing dirt-modified open-wheeled cars. Still, although he has had more than 250 feature wins during his career, Griffin never made it to the big time. Nevertheless, he was successful enough to make a living in the sport he loved.

His career trailed off by the mid-Seventies, but Pee Wee still raced as late as 1981, competing in six Auto Racing Club of America stock car races, including the ARCA 200-mile race at the famed Daytona Speedway. His best race that year was a second-place finish at the Michigan International Speedway.

Investigators say a turning point in Pee Wee’s life came in the mid-Seventies when he met Pepe Sarmiento, a ruthless international narcotics smuggler of Colombian descent who became his primary supplier of marijuana and cocaine. Sarmiento is currently an international fugitive, wanted in connection with the murder of a witness in a New York drug trial and on a federal narcotics indictment out of the Southern District of Florida. FBI agents believe that Pee Wee quickly became a favorite of Sarmien-to’s when he returned a $1 million overpay – ment in one of his early drug transactions with the Colombian. On another occasion, Griffin allegedly gained points with the Colombian drug kingpin when he personally carried $10 million in U.S. currency out of the country for Sarmiento in a private plane. The federal government first learned of Pee Wee’s narcotics activities when he was spotted with Sarmiento.

Although federal investigators say Pee Wee’s drug organization numbered more than 50 individuals, only he and five other men were charged in the 1982 indictment. They included George “Big George” Bowser, yacht pilot Cecil “Frick” Whitaker Jr., Joseph “Billy Joe” Campbell, Fred Sellers and Herbert Tillman, a man the government alleged offered a $100,000 bribe to an FBI clerk to find out what the agency knew about Griffin’s narcotics activities. Although race cars were not used, the Miami-based investigation was known as the “race car driver’s case,” since the narcotics were distributed primarily through contacts Griffin made as a professional driver.

The government said Griffin and his associates were meeting the “mother ships” -freighters carrying large shipments of cocaine and marijuana contraband-in the northeast Providence Channel near Chub Cay on the eastern side of the Bahamas, approximately 50 miles due west of Nassau. The freighters, typically carrying about 300 to 400 bales of marijuana, would be met by Pee Wee’s Hatteras sport fishing yachts that would then carry the narcotics to the western edge of the Bahamas, near Bimini, to an area known as the Mackey Shoals. At that point, the drugs would be loaded onto as many as 20 “cigarette” boats (sleek speed boats that range from 28 to 35 feet in length), each capable of quickly running 2,000-pound loads of pot the 45 to 50 miles to the South Florida shore. The marijuana would then be offloaded in vans or trucks in the West Palm Beach area. Sometimes, the pot would be stored in a North Miami warehouse.

From there, investigators say, Griffin distributed the narcotics to New Jersey, North Carolina, Ohio, Alabama and California. His distribution to North Carolina, for instance, was through a race driver named Pete Pistone. Griffin met Pistone, an unin-dicted co-conspirator, in the late Seventies through Pistone’s father, Tiger Tom Pistone, a race car parts supplier. Griffin bought his pot from the Colombians for about $50 a pound, but sold it for roughly $250 a pound to Pistone, who distributed the drugs in North Carolina.

The government says Griffin’s most profitable drug smuggling years were in 1979, 1980 and 1981. Those were also the years in which investigators documented some of his most significant business investments. During the summer of 1979, for instance, he shelled out $307,000 to buy the 53-foot Hat-teras yacht “Pia Star.” The following February, Griffin paid $369,000 for the 55-foot yacht “Donna Lee,” and during the summer of 1980 he bought two airplanes, a Merlin HI B aircraft at a cost of $1.5 million and, four days later, a Piper Aerostar for $296,000. In the spring of 1981, Pee Wee purchased two more yachts, one of them costing $451,000. When he was indicted in early 1982, the government initiated foreclosure actions on three Hatteras yachts, a 62-foot Norseman motor vessel, a 33-foot cigarette boat, three Boston Whalers, three modified stock race cars, three pickup trucks, a Freightliner truck, residences in Fort Lauderdale and North Miami Beach, a North Miami warehouse and a 10.2-acre tract of real estate in North Carolina.

In September 1983 Pee Wee pleaded guilty to two counts of conspiracy to possess marijuana with intent to distribute. A part of his plea bargain called for him to cooperate with the FBI and IRS. He also agreed to testify for the government in return for assurances that he would not be prosecuted for any previous crimes other than those for which he was indicted. Although Pee Wee did provide agents with information about narcotics trafficking, he did leave out one little thing: According to the government, he made no mention of his sprawling 111-acre ranch in Texas.

Investigators say they first learned of the ranch in early 1984. At the time, Pee Wee, out of jail on bond, asked permission to take a trip to Houston. Drug Enforcement Administration agents from Miami followed him to the DKG Ranch and subsequently asked the Dallas offices of the FBI and DEA for assistance. After establishing Griffin’s ownership of the DKG through records research and interviews, on March 13, 1984 a federal judge granted a request by Wes Rivers, an assistant U.S. attorney with the Gulf Coast Drug Task Force in Beaumont, to seize the ranch. Legal briefs filed by the U.S. government claim a previous net worth investigation of Griffin shows he lacked a significant source of income, other than from illegal drug trafficking, to purchase any of his sizable assets-including the DKG.

Since the seizure, three private security guards have provided 24-hour security for the ranch and a U.S. marshal has lived part-time on the DKG. Aduddell says that during the first few weeks he and his wife lived on the ranch they received threats. But the guards will stay around for another reason: The government believes that Pee Wee has hidden additional cash and gold bullion somewhere on the ranch.

According to an affidavit of Dallas FBI special agent Joseph Masterson, Pee Wee once interrupted a night of drinking at a Pilot Point bar to show two friends $4 million in cash and $3 million in gold bullion in a vault that investigators have yet to find. Another informant claims that Pee Wee talked of having 100 pounds of gold stashed on the DKG.

When government attorneys subpoenaed Pee Wee for a civil deposition last August, they asked him to bring individual income tax returns as well as returns for some 24 different corporations he allegedly owned, including a string of automotive radiator shops, stereo shops, an advertising agency, a publishing company and numerous Bahamian corporations that were suspected fronts for his narcotics enterprise. The government also asked Griffin to bring with him banking records from accounts or transactions with Manufacturers Hanover Trust Co. in New York, The Bank of Nova Scotia in the Bahamas, the Pilot Point National Bank and the First State Bank of Gainesville. Griffin never produced the documents.

Since the seizure, Pee Wee’s attorneys, who include well-known San Antonio criminal attorney Gerald Goldstein, have filed counter-claims for the ranch and all the items inventoried during the March 14 search. His attorneys say the government knew Pee Wee owned the Texas ranch before he pleaded guilty to the narcotics charges. They argue that since the government agreed to no further criminal or civil action against Griffin, it had gone back on its word by seizing the ranch after the plea agreement was accepted. They claim that a Florida judge has issued an oral ruling siding with Griffin.

Neither Pee Wee nor his wife, Donna, would verify ownership of the property when they were called for depositions last August. Invoking their Fifth Amendment rights against self-incrimination, both testified only to their names, birthdates and current addresses.

Nor is Pee Wee talking about any money he may have stashed on the ranch or in offshore bank accounts. “We asked him specifically concerning offshore accounts that he had and the methods he used to move funds around in the world and where he kept all his money, how much he still had, these types of questions,” one investigator said in a recent deposition. “He basically just grinned, looked away and became silent.”

While Pee Wee and Big Brother battle in the courts, life goes on at the DKG, where the eyes of the Washington bureaucracy are focused on an arduous first-of-its-kind experiment. True to form, the federal government has even set up an administrative agency to oversee such seizures of property owned by convicted narcotics traffickers. It’s called NASAF-National Assets Seizures and Forfeitures.

“The people in Washington are watching this thing real close,” says Aduddell, “because we’re setting a precedent here, taking care of a ranch. The government doesn’t want to be in the horse business. But they could hardly afford to shut the gates on this business and watch the weeds grow. This is a $10-million investment.”

Horse ranchers are a conservative lot, says Aduddell, believers in the Jeffersonian notion that “that government is best which governs least.” They haven’t taken very kindly to the idea of the government as horse breeder. It’s been difficult for Aduddell to explain to his fellow ranchers that the government isn’t trying to do anything un-American; it’s just trying to hit the narcotics dealers where it hurts-in the pocketbook.

“Most of the ranchers have had a hard time getting used to the notion of using the taxpayer’s money to run a ranch,” he says. “And we’ve had a few problems with the public. The easiest thing to make people irate is religion and the government.”

When he started work on the day of the seizure, the government told Aduddell they’d need him maybe two hours a day for about six months. Eighteen months later, Aduddell has discovered that running the DKG is a full-time job for him and his wife Linda, who also operate their own ranch, the Sierra Vista. Aduddell is a real-life cowboy, a rancher much of his life. He’s the first to admit that raising and breeding some 120 head of Appaloosas for the government is not the easiest thing he’s ever done.

“I have to answer to the government, not just to myself,” he says. “Sometimes it’s tough talking to people who sit behind a desk. Most of the time I’m dealing with people who’ve never even seen a horse ranch. Anytime I want to spend any money on the ranch, I have to fill out a requisition form just like anybody else who works for the government.”

One of Aduddell’s major problems is convincing the federal government to let him reduce the size of his herd through auctions. Ideally, the ranch is designed for about 80 to 100 head, but last spring, when the herd numbered 192, Aduddell wrote a letter to Bob Wortham, U.S. attorney for the Eastern District of Texas, telling him of the critical problem. Aduddell was subsequently given the go-ahead to hold a horse auction last August. The sale lightened the herd by 60 horses, and fattened the government’s bank account by an additional $200,000.

Actually, Aduddell’s part-time government job might be spoiling him a bit. “These are high-dollar horses, as good a quality of Appaloosas as you can buy,” he says. “We’ve got a $22,000 electronic microscope in the breeding barn. That’s a better microscope than most hospitals have.” The ranch also boasts a $52,000 horse trailer, a closed-circuit television camera and an automatic flea disinfectant spray system in each breeding barn stall.

While it is true that the DKG is a fine spread with some valuable horses, it also represents a light at the end of the tunnel for Pee Wee-a new start for a life torn by the perils of the drug trade.

No doubt about it, the DKG is worth fighting for. Whoever prevails in the court struggle will inherit one of the finest-if not the finest-horse ranches in the Aubrey area. But it may be years before we ever find out who will end up holding the deed to the ranch that narcotics built.