A PHOTO TAKEN TWO WEEKS AGO on Sveti Stefan where, in the presence of Milo Djukanovic, Stanko Subotic received an American Academy of Science award for the service industry The launch last week of a crackdown by the Serbian authorities against self proclaimed entrepreneur Stanko Subotic aka Cane, which started with the arrests of eight members of his cigarette smuggling operation, is in fact the first serious step in cleansing Serbia, and the entire Balkans, of organised crime. Nacional has discovered that the Serbian authorities' public crackdown against Subotic started after Serbian leaders Vojislav Kostunica and Boris Tadic did not agree to communicate with him off the record, nor where they interested in what he had to tell them via his intermediary Aleksandar Tijanic, a powerful Serbian journalist close to Subotic. Subotic had done everything he could over the past months to stop his name appearing officially among those of the top people in organised crime in Serbia, but Serbia's leaders were not interested in his money.

Subotic had apparently also rubbed them the wrong way as of late with his increasingly aggressive "entrepreneurial" activities – the laundering, in fact, of illegal funds. He started buying up attractive real estate in the Belgrade environs recently, and the building of the former federal government, and he had started to work on improving his image, and began posing for photographers and accepting society awards in Montenegro in the select company of Milo Djukanovic and Svetozar Marovic, one-time top politicians in the country, and several other less important politicians and business people from Croatia and Macedonia. Nacional's well-informed sources have confirmed that this sped up the pace of Operation Net (Mreža), which led finally to Subotic being suspected of criminal activities.

From the middle of last week the Serbian police has been searching for Stanko Subotic, aka Cane, with the aim of arresting him as he is suspected to be at the head of an organised group of smugglers of cigarettes and other merchandise, which has cheated the state budget of at least 40 million euros. The search is the result of several years of work by the Serbian police that started as a part of Operation Net on 1 June 2003. A part of the operation was concluded at the end of last week with the arrest of eight persons the police claim are members of Subotic's smuggling outfit.

Subotic, the self proclaimed entrepreneur, is one of the wealthiest Serbians, and is among the leading fat cats in South Eastern Europe – the Polish paper Wprost estimates his wealth at 500 million euros. He was born in the small settlement of Ubu 48 years ago, and his formal place of residence is Switzerland, where he owns a luxurious flat on Lake Geneva at No. 7 Central Park. He was entirely unknown to the public until May of 2001 when Nacional published the first in a series of texts in which Subotic is described as the chief mafia boss in the Balkans. His Swiss citizenship could help Subotic to defend himself at large from the charges of the Serbian police. Switzerland does not extradite its citizens, and it is still unknown where Subotic is since the Serbian police arrested eight members of his gang. If he is in Switzerland he is likely to launch a legal struggle the likes of which fugitive Croatian general Vladimir Zagorec is leading in Austria, who does not want into Croatian police detention. It is a question of time before Subotic begins telling the public, through expensive foreign lawyers, that he is an innocent victim of politics.

SIX YEARS AGO Nacional ran the exclusive story of Stanko Subotic, the linchpin in the Balkan tobacco mob, on its cover pageAnd although Nacional wrote in detail and documented Subotic's criminal activities as many as six years ago, the Serbian police only officially announced it suspected Subotic of criminal activities last week. Arrested were Miodrag Zavisic, the former head of the Novi Sad police department, Milan Popivoda, once the top man of State Security in Novi Sad, and Milan Milovanovic Mrgud, the founder of the Scorpions paramilitary formation and the deputy minister of the interior in the government of the former so-called Republic of Srpska Krajina. Arrested along with them were customs officers Nebojsa Nikolic Tarzan and Drago Dodevski, as was Milan Rankovic Pekin, an employee of the Mia Company of Ubu, owned by Stanko Subotic. Also detained by the police are singer Ivana Olujic and Miroslav Pesic Miki. Mihalj Kertes, Milosevic's chief of the Customs Directorate, also suspected of smuggling cigarettes, is already in police detention. The Serbian police are also looking for Subotic's cousin Nikola Milosevic, Ivan Krcmaric and Jovica Randjelovic, and for Luka Nenadic and Stevan Banovic.

The case is being led by special prosecutor for organised crime Slobodan Radovanovic. That he was thorough in his assignment is also demonstrated by the fact that the prosecution on Friday ordered that a formal investigation be launched into the detained and other suspects, and that the former will remain in police detention until further notice. It is a question of time before an international Interpol arrest warrant is issued for Subotic, because it is unlikely that he would come to the police on his own account. And although the investigation has been declared an official secret, it is already known that Subotic's group is suspected of having cheated the state from 1995 to 1997 to the tune of 40 million euros, and that that money was transferred by way of Montenegro and Macedonia to Cyprus.

Operation Net was launched on 1 June 2003. Then minister of the interior Dusan Mihajlovic set up a working group to look into abuses and all forms of illegal activities in the traffic of cigarettes from 1996 to 2002. The first report was in the minister's cabinet by 8 March 2004. A month later agents met with the Serbian deputy public prosecutor and the further directives of the operation were laid out. In October of 2004 it was learned that there was an organised network of smugglers and a working group met with the special prosecutor and his deputy and submitted their complete report. In early November of 2005, at new consultations held at the premises of the Special Court in Belgrade's Ustanicka Street, the deputy special prosecutor said that serious abuses and illegal activities in the traffic of cigarettes on the territory of Serbia from 1995 to 2003 were at issue. The prosecutor's position was that criminal proceedings be launched against some of the suspects before district prosecutors in Novi Sad and Belgrade, and that the case be taken over by the Special Prosecution afterwards. The police were working on the case the entire time and in the end there were the arrests.

There was much public speculation revolving around Operation Net. In early April Serbian papers announced forthcoming arrests, but Subotic's name was not mentioned. In Serbia he is a very influential person and up to last week it was uncertain whether the competent bodies of the national administration would be able to carry out their work in peace. That Subotic enjoyed significant influence until recently is also demonstrated by his statement of last year that he personally from former interior minister Mihajlovic learned that the operation was being led and that Mihajlovic had told him that the operations of his company were in line with the law. Subotic then even said that Mihajlovic showed him the report, at the time when Operation Net was still a secret not known even to Mihajlovic's deputies. Mihajlovic has to this day not commented these claims by Subotic.

As of last week nothing is the same as it was for Subotic, with the arrests of his criminal associates what Nacional revealed on 15 May 2001 has been officially confirmed.

Just before the publication of that article, then Croatian interior minister Sime Lucin publicly confirmed that Subotic received a Croatian passport in the late 1990s. Before running the first article on Subotic, Nacional spent months researching his activities, above all because he was at the time a Croatian citizen.

According to Lucin's claims in an interview given to Feral Tribune, this Serbian "entrepreneur" got a Croatian passport at the recommendation of general Ljubo Cesic Rojs, but it was later established that the document was arranged by former state secretary at the interior ministry Vjeko Brajovic. He got the papers based on an article in the law concerning foreigners deserving credit for advancing Croatian national interests.

In May of 2001 Nacional wrote that Subotic's "business channels run across the entire Balkan thanks to the clandestine support or protection of top political and police authorities in almost all countries of the former Yugoslavia". In Serbia these were until recently Jovica Stanisic, the chief of the Serbian State Security Service, and Milorad Vucelic, the former vice president of Milosevic's Socialist Party of Serbia and the one time director of Serbian state TV. When Nacional wrote of Subotic, his chief political patron was Serbian Prime Minister Zoran Djindjic, and Nacional's revelations showed the darker side of the popular Djindjic.

SELF PROCLAIMED ENTREPRENEUR Stanko Subotic is one of the wealthiest SerbsNacional also wrote that Subotic's business partner was Montenegrin President Milo Djukanovic, who participated in the divvying of the smuggling profits. With the help of the Montenegrin Mia Company, fictively owned by Djukanovic's school buddies Dusko Ban and Zeljko Mihajlovic, and his off shore companies on Cyprus, one of which is called Dulwich, Subotic was one of the chief suppliers of cigarettes to the Yugoslav black market from all corners of the world. Milo Djukanovic took care of securing easily negotiated Montenegrin border controls in both directions – for the illegal import of merchandise for sale in Montenegro and Serbia, but also in some EU countries, and for the clandestine export of earnings to Cypriot and Swiss banks. Huge amounts of foreign currency were transported from the Federal Republic of Yugoslavia by private airplanes, designated as diplomatic packages. According to some estimates, only in the last five years of the last decade, the joint partnership of Djukanovic and Subotic earned them at least a billion dollars.

After the first Nacional article an intermediary tried to bribe Ivo Pukanic, the President of Board of the NCL Media Group, with 3 million dollars to ensure that Nacional no longer write on the subject. After Nacional in the next issue wrote in even greater detail of Subotic's smuggling operation, the story was carried by the leading media houses in Serbia and Montenegro, but also by the New York Times, the Financial Times, the Observer, and the Sunday Times. The first death threats directed at Ivo Pukanic began arriving at the Nacional editorial department. Nacional then interviewed Srecko Kestner, Subotic's former chief partner, who confirmed all of Nacional's revelations concerning Subotic and his connections to Djukanovic.

Nacional's revelations on the tobacco mob also initiated a parliamentary investigation in Montenegro. The investigating commission was called the Commission for establishing the facts, circumstances and key elements in allegations in an article published in the Zagreb publication Nacional entitled "Chief Balkan Mafia Boss" and other articles published in the publication. By the end of June of 2002 the commission released a comprehensive report in which it confirmed most of the allegations made by Nacional. In the meantime the International Crisis Group (ICG), an influential non-governmental organisation, included Subotic among the new Serbian oligarchs and chief persons stopping reforms in Serbia and Montenegro, and Hans Jürgen Kolb, the German State Attorney in Augsburg, called him one of the 20 biggest European cigarette smugglers in an interview for Nacional.

Among the other documents that confirm all of Nacional's revelations concerning the "entrepreneurship of Stanko Subotic is a POA (Counter-Intelligence Agency) document from 24 April 2003. It gives information on the collusion of criminal groups from Serbia & Montenegro and Croatia that emerged not long after the Belgrade liquidation of Zoran Djindjic. In it the POA claims. "…A significant role was played in the Federal Republic of Yugoslavia by criminals such as Stanko Subotic aka Cane. In the mid 1990s Subotic, with the aid of influential persons from the Yugoslav political scene and security structures (and based on the ideas of Milosevic's former chief of the national security portfolio Jovica Stanisic) set up the majority of his illicit activities in Montenegro, where he achieved a cooperation base don mutual interest with Montenegrin President Milo Djukanovic. Thanks to this, Montenegro for years secured and financed its informal economic and political separation from the rest of the Federal Republic of Yugoslavia, and in these circumstances Subotic, Djukanovic and people close to them illegally gained significant material wealth. Subotic was one of the chief organisers of the illegal distribution of high-profit products like petrol and cigarettes, and narcotics and gun running, but also of the organised liquidations of the competition. Besides Subotic, prominent roles in the cited activities were played by previously known members of the Yugoslav organised crime scene Ratko Djokic and Srecko Kestner, and the Surcin Group. After media pressure on Montenegrin President Djukanovic because of his complicity in criminal activities and the launching of an Italian investigation into the organised smuggling of cigarettes in Italy, Subotic became close with Serbian Prime Minister Djindjic and financed his political activities through donations, for which he receive in turn police and political protection."

The POA wrote without restraint of Subotic as a criminal who did not only smuggle cigarettes, but also petrol, arms and drugs and who would dispose of anyone that stood in his way in these operations.

Subotic showered Nacional with charges in court, most often for not publishing his denial. But Nacional did not want to publish meaningless and false denials in which Subotic says of himself that he is a respected businessperson and not a criminal. In several dozen suits he sued the editors and journalists of Nacional for insults and slander. He was passionately represented in court by lawyer Slobodan Budak, who glowingly and pompously said that it was an honour for him to present Subotic's claims against Nacional on his behalf.

After four years of not answering court summons, in October of 2005 Subotic in one day appeared at three deliberations, most likely after he was sure that non of the defendants would be there, who had previously in short told the court haw they had come to their information and why they had written of him. On the same occasion he gave another comprehensive interview to the Globus weekly in which he stated a series of nonsense and lies. When he suddenly appeared before court saying that he was a respectable business man, judge Jasna Radjenovic believed him and pronounced a court reprimand to Sina Karli, Nacional editor-in-chief, for insulting and slandering Subotic.

After last weeks arrest of Subotic's associates speculation appeared that he was in Montenegro. The Podgorica News said that criminal proceedings against Subotic could politically compromise Djukanovic and Svetozar Marovic, the former leaders of Montenegro and the Federal Republic of Yugoslavia, with whom Subotic was close to for years. The three of them appeared together in public last time in early March at Sveti Stefan when Subotic was granted an American Science Academy service industry award. The Democratic Serbian Party last week publicly asked Djukanovic how appropriate it was for him to be publicly photographed with Subotic, while in the People's Party they feel that an investigation of Subotic should not circumvent Djukanovic or Marovic and hope that the Montenegrin state prosecution will be intrigued by this relationship. It is interesting that Djukanovic recently announced that on the island of Sveti Nikola near Budva, where the chief investor is to be Subotic, the investment would come to as much as a billion euros. Now it is expected in Montenegro that the competent state institutions reassess the investment.

It is a question what is to become of Subotic's other investments. Up to now he laundered most of his illicit money by investing into legal projects. In France he produces wine, in Montenegro he imports alcoholic beverages, in Serbia he owns a meat-processing firm, and he remains by all appearances one of the secret co-owners of Future plus, the largest Serbian chance of kiosks. The formal owners of Future plus are Germany's WAZ and the Danish EMI Group. After the arrest of Subotic's associates the top management of Future plus publicly denied Subotic was a co-owner of the company. It appears that many may soon begin to distance themselves from Subotic.