A Man Called Peter

How did Hrvoje Petrac, a Croatian arms merchant and fugitive wanted by the International Criminal Tribunal get on an Israeli yacht?

Kobi Hayat learned one very important lesson from his short but nightmarish cruise a couple of months ago: Never take aboard people you don't know. Not even if they are Israelis looking for a "romantic cruise" along the coast of Turkey. In any event, it is not wise to host an escaped criminal from Croatia who is wanted for aiding a war criminal, even if he has a girlfriend and a lawyer in Israel. A fee of $1,300 is definitely not worth a 12-day detention and interrogations in a Turkish police station. And when that befalls you, even connections in the Likud Central Committee and with Israel's foreign minister are of no avail.

Hayat would rather remain anonymous. "I suffered enough from this affair and I want to forget it," he says in a meeting in the Sharon region. But unfortunately for him, he is already known to the Turkish police, the Foreign Ministry and the Israel Police. He came to the meeting with unconcealed reluctance. What he really wanted was not to tell his story, but rather to find out how much is known about him and his arrest.

A tall 45-year-old, Hayat works for a shipping company. In his spare time he cruises for pleasure and skippers sea vessels to earn extra money. He has a skipper's certificate that enables him to sail yachts of various types. He has been on dozens of cruises. But the last one, about two months ago, was different.

His partner on the trip and in detention, Yaacov ("Vivi") Ben Kiki, also does not want his name mentioned. Certainly not now, after the arrest caused the collapse of his cruise business in Turkey. Hayat and Ben Kiki were arrested there on suspicion of smuggling from Turkey to Greece, in return for payment, Hrvoje Petrac, a Croat criminal whom the media in three Balkan states describe as "one of the bosses of the Mafia." He is wanted by police forces all over the world and is also on Interpol's wanted list. Also taking part in the controversial cruise were two Israeli women, one of whom was introduced to the skippers as Petrac's girlfriend, and lawyer Oren Mann, who represents Petrac. The lawyer and the two women disembarked with Petrac on the Greek island of Rhodes.

Hayat and Ben Kiki were arrested when they brought the yacht back to its owner in Turkey. In contrast to the prevailing image of Turkish prisons, their conditions of detention were reasonable, the two relate, each in a different conversation. "True, it is not pleasant to be under arrest, but we were not subjected to torture of any kind. We were not beaten and we were not humiliated," Hayat says. "So I have no complaints about the Turkish authorities. They did their job. When I told the interrogator that I was innocent [using the English word] and acted in good faith, he replied, `You may be innocent, but this is your destiny.'"

International warrant

The episode raises questions about the Israel Police, which allowed Petrac to live in Israel for months, even though he was wanted around the world. Why is it so easy for international criminals to find a haven in Israel? This time, the affair might end in the courts - if not in Israel, then at least in Europe. Despite the involvement of the Israelis, the attempt to smuggle Petrac out failed. He is in detention in Greece, where legal proceedings are under way to get him extradited to Croatia. He has already been sentenced to six years in prison by a Zagreb court, and he will also be questioned by investigators from the special International Criminal Tribunal at The Hague. They want to question Petrac about the location of General Ante Gotovina, one of the most wanted war criminals in the world.

Hrvoje Petrac fled from Croatia at the end of 2004 or in early 2005, shortly before a court sentenced him, in February of this year, to prison for his involvement in the kidnapping-for-ransom of a 17-year-old boy a year earlier. The youth is the son of General Vladimir Zagorac, a former aide to the Croatian defense minister and today one of the major arms dealers in the country. According to reports in the Croatian media, Zagorac and Petrac were partners who had a falling out.

Petrac did not appear for the court hearing and was declared a fugitive from justice. An international arrest warrant was issued against him, and his name and photograph were put on Interpol's wanted list. Acting through Interpol, the Croatian police asked the Israel Police whether Petrac was hiding in Israel, and if so, to arrest and extradite him.

"We examined their request," says Assistant Commander Irit Buton, head of the special tasks department in the Investigations and Intelligence Branch at the national headquarters of the Israel Police in Jerusalem. "It turned out that he entered the country in March 2005 on a Croatian passport bearing his name and that he was staying in the country. We informed the Croats that under Israel's extradition laws, they would have to provide us with prima facie evidence of the suspicions or the crimes for which he was convicted. As soon as the evidence arrives, the Justice Ministry determines whether it meets the demands of the extradition laws. The Croats did not send us the evidence or any other material."

However, in April a Croatian delegation arrived in Israel, consisting of representatives of the police, the justice ministry and the security service. "We met with them," Buton continues. "They talked to us again about their desire that we arrest and extradite him, because of his conviction in connection with the kidnapping and ransom payment. But it was also hinted to us that they were interested in him because of the suspicion that he has ties with General Gotovina, who is wanted by the court in The Hague. We explained to them the extradition procedures to which we are committed under the law."

What happened next?

Buton: "The Croatians told us that the press in their country had wind of the story and that they were trying to prevent the publication of reports that Petrac was in Israel. But within a short time a report on the subject appeared. In our opinion, Petrac fled with false papers in the wake of the report."

What basis do you have for that assumption?

"There is no record of his departure at border control. He does not appear as having left the country legally with the same passport he used to enter Israel. We do not know how he left Israel, but we think he left by illegal methods."

Change of plans

One day in August, Kobi Hayat got a call from a friend. The friend told him that he was acting on behalf of a friend named Anat, who was looking for a skipper to take her on a romantic cruise along the coast of Turkey. Hayat took the job. "Anat called me from Turkey and said she was inviting a few friends from Israel on the cruise. I concluded all the details with her, including the fee and expenses they would pay me. I then received a call from attorney Oren Mann, who said: `My client spoke with you and I have to arrange a flight to Turkey for you.' On August 22 I flew to Dalaman airport [on Turkey's Mediterranean coast], where a taxi driver waited for me and drove me to the port of Gucek.

"I met with Anat that same evening and she introduced me to a man named Peter. She told me that Peter, a Croat, was her boyfriend. They told me they had already rented a yacht in my name. We slept on the yacht and the next morning I went to the shipping company to do the paperwork. I showed them my skipper's certificate, checked the equipment and made sure everything was in proper order on the yacht. That took a few hours."

How much did the yachting company get paid?

Hayat: "They got $3,600 for a week-long cruise. That is considered cheap."

It was a Bavaria 49-class yacht, with sails and an auxiliary engine. Attorney Mann boarded on the evening of August 23 and they set sail. "At night we dropped anchor in some bay and slept on the yacht and the next morning we continued the cruise," Hayat explains.

Did you talk to Peter during the trip?

"Yes. Regular conversations. Nothing personal. He said he was a businessman and that he had a yacht that was anchored in Italy. I got the impression that he knows about boats and the sea, but not so much about sailboats. He also said he has a vineyard in Croatia and invited me to visit him."

At a certain stage, Hayat says, Anat, Peter and Mann told him there had been a change of plan. The lawyer said he had to get back to Israel and Peter said he had to get to Athens. "Because of the change of plans they asked me to sail to Bodrum," Hayat says. "There they would disembark and catch flights, while I was to take the yacht back to Gucek."

Did you agree?

"Of course. I saw no problem. It wasn't the first time I had been on a cruise with passengers who changed the cruise plan."

Hayat informed the passengers that he would not be able to sail the yacht alone and asked if he could bring a friend aboard. They agreed. He phoned his friend, Yaacov Ben Kiki, who runs a business repairing and maintaining yachts in the port of Marmaris, in Turkey. He agreed to join in return for payment.

Ben Kiki is 45, like Hayat, of average height and with a sun- and wind-burned face. He has a reputation of being a true professional who knows all about yachts. After doing his military service in the Israel navy, in a unit that does underwater work, he became a maritime technician and since then has made a living by building, renovating and sailing boats. For a time he ran a shipyard in Los Angeles. He moved to Turkey a year and a half ago and set up the business in Marmaris with a local female partner.

The yacht stopped at Marmaris and Ben Kiki came aboard. They made for Bodrum, as planned. On the way a storm broke out. The crew took down the sails and tried to start the engine, but all it did was sputter. The passengers started to throw up, Hayat recalls.

"We were six or seven kilometers from Rhodes," Hayat and Ben Kiki say, "and they asked us to sail there because they did not feel well."

With some effort and a difficult struggle in the stormy seas, they reached the Greek island after midnight. The border control office was closed and they could not get their passports stamped. But there was nothing unusual in that: Maritime vessels often have to "take shelter" that way. There are thousands of boats and ships in the Mediterranean that enter coastal waters and drop anchor at various countries without their passengers being asked to produce papers. The entire group went ashore to eat at a restaurant. Afterward the two members of the crew went back to the yacht to sleep and the others went to a hotel. In the morning the four passengers came to the yacht to collect their luggage.

Didn't you think that was odd?

Hayat: "No. It happens all the time. Friends of mine went by yacht to Cyprus and didn't want to come back the same way, so they flew home."

Didn't you suspect them?

"No. Not at any stage."

And how did Peter behave?

"Normally. He did act like he was in charge, but he was very friendly. He even helped clean the boat during the trip."

The man in the photo

Hayat and Ben Kiki sailed back to Gucek. They arrived there on Saturday, August 27, and because they still had one more day before they had to return the yacht, Ben Kiki decided to invite his Turkish business partner for a cruise. The three spent a pleasurable day, dropped anchor in one of the bays in the area, and returned to Gucek the next day, so they could get the yacht back on time.

A few men were waiting for them on the dock. "I thought they were workers who would tie us to the dock," Hayat says. But as soon as the yacht was anchored, the "workers" jumped them. "They made us lie down, tied our hands and blindfolded us. I thought they were Palestinians, Palestinian terrorists, because at the time there were warnings about terrorism. They said nothing and searched us. Then they took us down into the hold and removed our blindfolds. I saw guys in civilian clothes with pistols and I felt reassured - I understood that they were apparently not terrorists. They told us that they were not regular police, but a special force. They put us in a car and we drove to a military base. All I had on was a bathing suit and a T-shirt."

At the base the three were separated and each was taken to a different interrogation. "They told me to tell them everything," Hayat relates. "That calmed me down, because I had nothing to hide."

What were you accused of?

"The interrogator told me that our passenger Peter is a criminal [and said]: `You helped a criminal.'"

After a time they were blindfolded again and taken to a police station in the city of Fethiye, where they were again questioned. One of the interrogators asked Hayat if he worked for Israel's Mossad espionage agency. Hayat said he did not. Then he asked whether Anat was a Mossad agent. Hayat explained that he did not know her well enough to answer. He and Ben Kiki told the interrogators everything they knew, including the name of the hotel in Rhodes where the passengers had stayed. The interrogators showed them a photograph of Petrac from the Interpol wanted list and they identified "Peter." In the police station, with the aid of an interpreter, formal testimony was taken from them.

"The interpreter told me that we were accused of assisting a fugitive from justice and that this is a serious offense that carries a prison term of seven years," Hayat recalls.

They spent the night in police lock-up. The next day, Monday, the two men and Ben Kiki's partner were brought before a judge. Before the hearing, the men managed to call the Israeli embassy in Ankara and report their arrest. "The judge asked a few questions, read out the testimony we had given and said he believed us and that we had done nothing criminal and he was releasing us," Hayat says. After the hearing they heard from the embassy by phone that they would in fact be released within a few hours.

The Turkish partner was released first and hired a lawyer from Istanbul. He flew in quickly and started to work energetically to deal with the bureaucratic barriers. The Israeli embassy and the consulate in Istanbul also called every so often to ask how they were. The Israeli consul general told them that the distance made it impossible for her to get there, but assured them over and over that she was on the case. Nevertheless, the "few hours" stretched into 10 days.

The delay made Hayat anxious and he called members of his family and friends who had connections in the Likud Central Committee. They, in turn, contacted Foreign Minister Silvan Shalom. But no appeal or intervention could overcome the bureaucratic hurdles. The Turkish police viewed them as being detained, not arrested. They were allowed to go out to shop and eat at restaurants - with a police escort - but had to sleep in the police station. It was not until 12 days after their arrest, on September 8, that their passports were returned to them and they could fly to Israel from Antalya.

The Israeli connection

Why did Petrac choose to hide in Israel? Apparently because he has known the country well for the past decade, has become acquainted with a number of Israelis - including a retired Israel Defense Forces brigadier general, Amos Kotzer, who is now an arms merchant - and has invested money here. In 2001, according to the investigation conducted by the Croatian authorities, Petrac and his business partner, General Zagorac (whose son Petrac was convicted of kidnapping), transferred $19 million to Israel, which was deposited in branch No. 844 of Bank Leumi, on Hama'apilim Street in the affluent community of Kfar Shmaryahu, just north of Tel Aviv. The money was deposited in five to seven transfers in an account that was opened by a company called Nevada Trading. The company does not appear on the list of the Registrar of Companies in Israel, and the investigators in Croatia think it is registered in a tax haven somewhere. Kotzer, who lives in Kfar Shmaryahu, denied then and continues to deny any connection to the bank account of Nevada Trading.

Hrvoje Petrac is considered one of the richest men in Croatia. He owns farmland, vineyards, a winery and buildings, among other assets, and was the owner of a car and motorcycle dealership. He is a salient example of the cunning businessmen and entrepreneurs who were able to exploit the collapse of Yugoslavia and the Balkan wars.

The war that broke out in 1991 between Croatia and Serbia, and between Serbs, Croats and Muslims in Bosnia-Hercegovina, was brutal and accompanied by war crimes on all sides.

The crimes attributed to General Ante Gotovina, Petrac's friend, were perpetrated toward the end of the war, in 1995. They include involvement in the murder of 150 Serbs and responsibility for the expulsion - the ethnic cleansing - of about 150,000 Serbs from the disputed region of Kraina. Because of Croatia's military inferiority vis-a-vis Serbia, the Croatian leadership was in desperate need of arms and did not always check out their suppliers very closely. Petrac used his connections with friends, some of them generals in the Croatian army, and also formed new ties, and within a few years became an important arms dealer in his country. He was imaginative and creative in finding ways to bypass the sanctions imposed by the United Nations and by NATO on the warring sides.

One of Petrac's associates was Amos Kotzer. "It is true that I knew Petrac, and we even tried to do business together," says Kotzer, though he refuses to explain the circumstances under which he met his Croatian colleague. "I knew him in 1994. He was already a well-known businessman. He had a winery and was, among other things, an importer of Volvos and Ducati motorcycles."

According to Kotzer, his joint business with Petrac was conducted in two stages. In the first, they tried to buy arms for Croatia from Eastern European countries. In the second stage, in 1996-1997, after the war, they tried to sell surplus weapons of the Croatian army to other countries, mainly in Africa. "But in both stages nothing came of it," Kotzer relates. "Petrac was very well connected to the security and military establishment of Croatia."

Kotzer was chief IDF paratroops and infantry officer in the 1980s. After retiring from the army he received a permit from the Defense Ministry to engage in arms sales and security consultancy. At the beginning of the 1990s he hooked up with another arms merchant, Nahum Manbar. At a certain stage Kotzer told the Defense Ministry chief of security that his partner was trying to sell chemical warfare materials to the Iranians.

Manbar was arrested in 1997. He told his interrogators that Kotzer had known about his secret contacts with the Iranians and had even taken part in meetings with Iranian representatives, which were held in the Marriott Hotel in Vienna. In the trial Kotzer was one of the key prosecution witnesses. In a conversation last week Kotzer denied Manbar's allegations. He says he was not present at any meeting with Iranians and was not involved in any attempt to sell chemical warfare materials to Iran, and adds: "In the trial Manbar retracted those allegations against me."

The District Court in Tel Aviv convicted Manbar of treason and of aiding the enemy in its war against Israel. He was sentenced to 16 years in prison. Kotzer, in contrast, was considered a friend of the defense establishment and his ties with it only grew closer. According to Kotzer, there is no connection between his activity in Croatia and his business acquaintanceship with Petrac, and his work with Manbar in that period. "These are two different and separate business operations," he explains.

Kotzer and Petrac continued their business cooperation after the end of the Balkan wars. Kotzer invested in Petrac's insurance company, Atlas. But the company ran into trouble and Kotzer says that even though he is still officially a shareholder (he declines to specify how many shares he owns), he treates the investment as a "lost debt."

Kotzer maintains vehemently that he never met General Gotovina and certainly did not know about the alleged connection between Petrac and Gotovina or about the suspicions against the two. "The last time I saw Petrac was in 1999 and since then the ties between us have been severed," Kotzer says. "The fact is that he did not call me, and I learned from Croatian newspapers that he was in Israel. He must have understood that I would not help him."

The big mistake

The onset of Petrac's business career, in the 1980s, coincided with the first signs of the crumbling of the communist central government in Yugoslavia. He worked in a number of import-export firms and in one of them he was appointed head of the warehouse, but was forced to leave after the police launched an investigation against him on suspicion that he had inflated prices. In 1990 he discovered the marvels of foreign-currency trading. Some time later, in media interviews, he boasted that in this occupation he had actually "saved Croatia from a financial disaster" that Serbia had tried to inflict on its adversary.

Petrac bought cheaply shares of companies that were put up for sale and mortgaged them to get loans and credit lines at reduced rates from banks. It was not long before he became known throughout the country, and especially in the ruling circles of President Franjo Tudjman, as a gifted businessman, and he began to receive offers to go into business with would-be entrepreneurs. One of them was the president's grandson, Dejan Kosutic; the two became partners in Kaptol Bank.

Toward the end of the 1990s, the media began to portray Petrac also as the head of a group that used rather dubious methods. It turned out that one of the group's holdings was a casino. The media stated explicitly that Petrac was one of the heads of the country's crime syndicate. Evidence supporting these suspicions was published by the Belgrade newspaper Nedelni Telegraf. The paper obtained transcripts of phone calls made by Petrac, which were apparently recorded by a secret service of one of the Balkan states. The transcripts showed that Petrac was apparently involved in black market deals revolving around the smuggling of drugs and cigarettes.

Additional confirmation of the suspicions came when it was learned that Petrac had attended the funeral of the godfather of Croatian crime, Zlatko Bagaric, who had been murdered. Asked to explain his presence at the funeral, Petrac said it had been his "big mistake." Also murdered that year was Vijeko Slisko, known as Zagreb's "king of slot machines." The assassin was a hired killer of Belgian origin who had served in President Tudjman's special protection unit (dubbed the "Praetorian Guard"). Petrac was questioned by the police, but said he knew nothing about the Slisko murder and had nothing to do with it.

On top of all this, the Serbian media (among others, the weekly Nin) alleged that Petrac is acquainted with a Serb gang chieftain. And not just any chieftain, but none other than the notorious Milorad Lukovic. Lukovic, who is known as "Legija" (for his service in the French Foreign Legion), was the commander of a special unit in the Serbian security forces that put down the uprising of the Albanian Muslims in Kosovo. In 2001 he left the army and became head of a crime syndicate.

The members of the gang, headed by Legija, are suspected of initiating and carrying out the assassination of the Serbian prime minister, Zoran Djindjic, in May 2003. The Serbian media were unable to specify the ties, if any, that Petrac had with Legija.

But apart from media insinuations and police interrogations, Petrac had no real dealings with the law, with the exception of one incident in which he was convicted of attacking a cleaning woman in a building where a restaurant he owned was located. It was not until 2004 that the insinuations became facts, which were confirmed in court. Together with several others, he was suspected of being involved in the kidnapping of General Zagorac's son. According to the prosecution, the kidnappers demanded a ransom of 1.5 million euros, but made do with half that amount. Some of them were convicted and sent to prison. Petrac, who was given a six-year sentence, and another of those convicted, Ivan Matkovic, the main suspect in the case, did not show up in court and were declared fugitives from the law.

Arrest in Greece

After the passengers left the yacht in Rhodes, attorney Mann returned to Israel. Petrac arrived in the port city of Patras in Greece, via Crete. There he boarded a ferry bound for Ancona, Italy. On August 31, while the ferry made a stop at the Greek port of Igoumenitsa, police came aboard and arrested Petrac. A Greek court sentenced him to five months in prison for holding a false passport and declared him extraditable.

Through Greek and Croatian lawyers, Petrac appealed to the Greek Supreme Court. That hearing will take place in two weeks. He also asked for political asylum in Greece, claiming he was being persecuted for his political beliefs in Croatia and would not get a fair trial there. According to his lawyers, all the legal procedures in which he was convicted of kidnapping were "one big perversion" of justice. They are relying, among other evidence, on what Ivan Matkovic said after he was arrested in Croatia. Matkovic maintains that neither he nor Petrac was involved in the kidnapping.

Requests to Petrac's lawyers in Greece for Petrac's version of the events drew no response. Petrac's Israeli lawyer, Mann, declined to describe the circumstances in which he met Petrac and how he came to be his lawyer and the manager of his business affairs in Israel. He also declined to provide any information about the cruise or about "Anat," Petrac's girlfriend. "Until the appeal is heard in Greece, I cannot comment on the affair," Mann said in a brief conversation. "All I can say is that the cruise from Turkey to Greece was regular and legal, and not a smuggling attempt. He [Petrac] has no criminal past. Everything that is being conducted against him is political persecution."

The political motive is related primarily to Petrac's privileged association with General Ante Gotovina. (Interestingly, the Croatian general, like the Serbian Legija, also served in the French Foreign Legion.) In the view of the Swiss prosecutor Carla Del Ponte, the chief prosecutor of the War Crimes Tribunal, Gotovina is one of the the most important wanted individuals she is seeking to capture, along with two Serbian-Bosnians, General Ratko Mladic and the politician Radovan Karadzic.

Under the pressure and influence of Del Ponte, the European Union member-states adopted a tough policy toward Croatia: Until Gotovina is arrested and extradited to the court in The Hague, Croatia will not be able to enter into negotiations to join the EU. Petrac, she believes, is a key person who can bring about Gotovina's arrest - which is why, in 2001, he was barred from entering EU countries.

The international pressure seems to have its effect. In the past few months the Croatian government has been trying to appease the Europeans and create at least the appearance of cooperation. From its point of view, the arrest and extradition of Petrac can attest to the sincere efforts that are being made to find the wanted war criminal, who is viewed as a national hero by many of his compatriots. "They know that the moment Gotovina will be turned over, their days in power are numbered. They have made Petrac a scapegoat to atone for their sins," attorney Mann says about the Croatian political echelon.

Mann also thinks he knows how Petrac was caught, but will not elaborate. The Turkish interrogators told Hayat and Ben Kiki that they kept Petrac under constant surveillance and saw him board the yacht, but, they said, because of a bureaucratic hitch (they did not have an arrest warrant) they did not detain him and let him set sail. In contrast, Assistant Commander Buton attributes Petrac's arrest to the resourcefulness of the Israel Police. The Turkish authorities' report to the Israeli embassy in Ankara about the arrest of the two Israelis, who had skippered a yacht carrying a Croatian passenger named Peter, lit a red light, she says.

"Our attache for police affairs put one and one together and suspected that Peter was the wanted man Petrac," Buton says. "The attache told the Turks about his supposition, and that is why the interrogators showed the two Israeli detainees Petrac's photograph; they affirmed that the man in the photo was their passenger. The attache immediately called his Croatian counterpart and gave him the information. It turned out that the Croats already knew that Petrac was hiding in Turkey, but forgot to tell us. The Croatian attache and the Turkish authorities sent an alert to the Greeks with the name of the hotel in which Petrac stayed in Rhodes, and they caught him."

As proof of the contribution made by the Israel Police to the arrest, Buton points to the fact that the Israeli attache received a special citation of honor in a ceremony that was held in the Croatian embassy in Ankara.

But international politics is of little interest to the two Israel yachtsmen. Kobi Hayat says he wants "to divorce himself from the whole matter." Ben Kiki, however, cannot do that, because in the meantime he is not being allowed to enter Turkey. "I suffered tremendous damage," he says. "The business I established in Turkey is collapsing, and I am the subject of gossip and rumors in the marinas in Israel. Who will compensate me for all this?" n