Around midday on 6 June 2001, locals from Pilar da Bretanha, a parish on the northwestern tip of the Atlantic island São Miguel, saw a white yacht, about 40 feet long, drifting aimlessly near the area’s sheer cliffs. None of the villagers had ever seen a boat of this size floating so close to that part of the coast, where the sea was shallow, the tides strong and the rocks razor-sharp. They supposed it was an amateur sailor who had got lost.

In fact, the man sailing the boat was a skilled seaman. Two Italian passports, a Spanish passport and a Spanish national ID card were later found in his possession, all of which showed the same 44-year-old with weathered skin and dark curly hair. But each of the four documents listed a different name. In the previous three months, he had crossed the Atlantic twice, sailing more than 3,000 miles from the Canary Islands, just west of Morocco, to north-east Venezuela, and then back again, to São Miguel, 1,000 miles west of Portugal.

Although he was under orders to take the yacht to mainland Spain, his return crossing had been rough. Big lumps of Atlantic swell had pummelled the boat, damaging the rudder and leaving him floundering. Realising he wouldn’t make it to Spain without stopping, he set a course for São Miguel, the largest of the cluster of nine volcanic islands that make up the Azores, a bucolic archipelago first colonised by Portugal in the 15th century.

But he couldn’t go directly into harbour. If the port authorities checked his boat, they would find tens of millions of pounds worth of uncut cocaine, which he was ferrying from Venezuela for a gang based in Spain’s Balearic Islands. He had to get rid of his freight temporarily, and so he began scouring the coast for a place to hide the drugs.

São Miguel’s coastline is pocked with grottos and secluded coves. The sailor navigated the yacht to a cave near Pilar da Bretanha and began offloading the cocaine, which was bound with plastic and rubber in hundreds of packages the size of building bricks. According to the police investigation that followed, he secured the contraband with fishing nets and chains, submerging it beneath the water with an anchor. But as he set sail for the nearest harbour, a small fishing town called Rabo de Peixe about 15 miles to the south-east, skeins of fog drifted over São Miguel’s cliffs. Another swell began to rise, waves pounded the island’s rocky inlets and the netting holding the cocaine unravelled.

Then the packages started to wash ashore.

For hundreds of years, most of the people on São Miguel have subsisted on farming, fishing, dairy cattle, or, more recently, government benefits. The island has 140,000 inhabitants, most of whom are separated by only one or two acquaintances. Although the island has the mix of intimacy and claustrophobia that marks many small communities, the predictability of life here creates a sense of security that is reinforced by the vast Atlantic Ocean, which barricades Azoreans within a subtropical paradise. “The paradox of the Azores is that you are always wanting to leave when you’re here, and always wanting return when you’re not,” Tiago Melo Bento, a local film-maker, told me.

The arrival in the summer of 2001 of more than half a metric tonne of extraordinarily pure cocaine turned São Miguel upside down. Earlier this year, I visited the island to speak to people who were affected by the influx of the cocaine, or were involved in trying to track down the smuggler. The stories they told of how the drugs changed the island were by turns bizarre, thrilling and tragic. No one expected in early June 2001 that they would still be talking about the effects of the cocaine nearly two decades later.

On 7 June, the day after the yacht was first sighted, a man from Pilar da Bretanha climbed down a steep path to the small cove where he often fished. On the shore, flapping in the surf like a beached jellyfish, was a large mound covered in black plastic. Beneath the plastic, the fisherman found scores of the small packages. Leaking from some of them was a substance he thought looked very much like flour. He decided to call the police.

Within hours, local officers had registered some 270 packages of uncut cocaine, weighing 290kg. It was only the first of many such discoveries. On 15 June, more than a week after the first batch was found, a man stumbled across 158kg (worth roughly £16m today) in another cove near Pilar da Bretanha. Two days later, a school teacher named Francisco Negalha alerted the police after finding 15kg on a beach on the other side of the island. “I was scared and hesitant even to approach them,” Negalha told me. “I thought someone may have been watching me and might kill me if they saw me touch them.” In the space of a fortnight, there were 11 registered seizures totalling just under 500kg of cocaine.

Not everyone who found packages reported it to authorities. A number of islanders became small-time dealers and began transporting cocaine across the island in milk churns, paint tins and socks. One such report suggested that two fishermen had seen the man on the yacht dumping some of his cocaine. No one knows how much of the drug they retrieved, nor when they rescued it, but the stories of these two fishermen have become legendary among the drug-users in São Miguel. I heard that one of these men was selling so much of the stuff from his car that his seats were white with powder. The same man had apparently paid a friend 300g of cocaine just to charge his phone. Other Azoreans “were selling beer glasses full of pure cocaine”, said Andre Costa, an entrepreneur and musician from the south of the island. Each one of these “copos”, which were about a third of a pint, contained about 150g and cost €20 (£17) – many hundreds of times cheaper than what it would cost in London today. On 25 June 2001, the headline of the local newspaper, Açoriano Oriental, read: “Police fear the mass dealing of cocaine”.

The coast near Pilar da Bretanha on the island of São Miguel. Photograph: Alamy

Before the yacht arrived, locals had seen little cocaine on the island. It was more common to find heroin or hashish. “Cocaine was a drug of the elite,” Jose Lopes, one of the leading inspectors from Portugal’s judicial police, told me. “It was expensive.” There was really only one previous case of trafficking that people remembered with any clarity. In 1995, an Italian named Marco Morotti was caught in the port of Ponta Delgada, São Miguel’s largest town, transporting large quantities of cocaine dissolved in petrol containers. But Morotti’s product had been seized by the police before it reached the islanders.

Now, two types of cocaine were circulating on São Miguel: one was the sort of fine white powder familiar from film and TV shows. The other was in yellowish crystals. Most users snorted the powder, but dissolved the crystals in water and then injected it into their veins. Both methods were potent. “It was euphoria,” Costa said. “You were floating.” One recovering drug user from Rabo de Peixe told me that he and a family member consumed more than a kilo in a month. A police officer told me the story of a man nicknamed Joaninha, or Ladybird, who had hooked himself up to a drip of cocaine and water and sat in his house getting high for days.

A product so valuable in the rest of the world was rendered almost worthless through abundance. “They had gold, but they didn’t know how to work with it,” Ruben Frias, the head of the local fishermen’s association in Rabo de Peixe, told me. There were rumours that housewives were frying mackerel in cocaine, thinking it was flour, and that old fishermen were pouring it into their coffees like sugar. No one knew how much of the stuff was still out there.

In the 24 hours after he had arrived on São Miguel, the man on the yacht had barely ventured out of his cabin. He had pored over maps and made several phone calls to find out how he could fix his boat’s damaged rudder, but he didn’t speak Portuguese and couldn’t afford to draw any more attention to himself than was absolutely necessary. As he lay in his narrow bunk on the night of 7 June, he didn’t know that police officers were already watching him.

Jose Lopes, the judicial police inspector, had been chosen as one of the leaders of the investigation. At the time, he was 34 years old and had worked eight years as a policeman, seven of them on the Azores. He was very familiar with the local drug trade and had a reputation for his encyclopaedic memory. When we spoke, Lopes also claimed he has a “sixth sense” for solving mysteries.

It hadn’t taken Lopes long to figure out that the smuggler’s yacht was floating in the harbour in Rabo de Peixe. He knew that the cocaine had almost certainly arrived by boat. Thanks to the testimonies of villagers, who had described the vessel, and records of the coming and goings of boats kept by the maritime police, Lopes and his team were able to track down the yacht within a matter of hours. Then they began to stake it out.

At around 1am on 8 June, police watched as a Nissan Micra parked up beside the yacht. They later found out that the car had been rented at the airport by a man named Vito Rosario Quinci, who had arrived by plane the previous day. Vito Rosario turned out to be the nephew of the smuggler, a Sicilian whose real name was Antonino Quinci.

Spanish prosecutors would later claim that Vito Rosario was the link between Quinci and the unnamed Spanish organisation running the cocaine operation. According to Spanish court documents, four months before Quinci arrived in the Azores, the leader of the smuggling ring had bought an 11-year-old Sun Kiss 47 yacht for €156,000 in Puerto de Mogán in the Canary Islands, and transferred it to Quinci under an alias. It was later discovered that Quinci’s yacht was only one part of a larger operation. Two more boats, each carrying more than half a tonne of cocaine, were destined for different ports in Spain. (Vito was later found guilty of involvement in this drug smuggling operation and sentenced to 17 years in jail in Spain. However, in 2007, the conviction was overturned after an appeal found that the police had used illegal wiretapping to gather evidence. He denied knowledge of the drug-smuggling operation.)

Photos from Antonino Quinci’s various identification documents

Vito met his uncle in the cramped living quarters of the yacht. Later that morning, the two men sailed out of the harbour. Police tailed them to Pilar da Bretanha, the location where Quinci had attempted to stash the cocaine two days earlier. The pair drifted there for 35 minutes, presumably long enough to establish that the cargo was missing. Then police followed them as they sailed around to the town of Ponta Delgada, the Azores’ economic capital, on the south side of the island.

There, in the town’s harbour, Quinci and Vito set up base for the next 12 days. They seemed to do little except make occasional trips on a rubber dinghy, sometimes to buy fuel and other supplies, sometimes to places where police could not track them. When sources in port tipped off investigators that the yacht’s rudder would be fixed by 22 June, he knew his team had to act fast. At 9.30am on 20 June, just under two weeks after the yacht was first spotted, they raided the vessel.

In the bowels of the yacht, Lopes and his team found Quinci surrounded by maps and piles of documents, including a notebook marking the boat’s journey from Venezuela via Barbados to São Miguel. On a shelf in the cabin, wrapped up in a plastic bag, investigators also found a brick of cocaine weighing 960g and a film canister containing another three grams. Quinci’s nephew, Vito, had disappeared.

The arrest went smoothly. “Quinci was easy to deal with,” Lopes said. The inspector spoke decent Italian, having lived in the country for a short time before he had become a police officer. He and Quinci were able to converse informally. “Quinci was talkative for someone who had just been detained on a drug charge,” Lopes said. “He seemed worried by the fact that large amounts of cocaine were washing up all over the island.” Quinci even offered to direct officers to the area where he had hidden the cocaine.

But in an official interrogation on the following day, Quinci suddenly stopped cooperating. He denied having trafficked the cocaine, and said the bricks the police seized from the boat were things he had chanced upon at sea. “He almost displayed an arrogance, as if he were above proceedings,” Catia Bendetti, Quinci’s translator during the interrogation, told me. “He barely said a word.” Perhaps Quinci was scared. He had two young children and a girlfriend who were vulnerable to reprisals, and he had just lost tens of millions of pounds worth of someone else’s cocaine. Or perhaps he thought he could avoid prosecution. What soon became clear, however, was that he had not given up hope of escaping the island.

Before Quinci’s cocaine had washed up on shore, Lopes and his colleagues had São Miguel’s drug trade on lockdown. “We knew almost everything that there was to know about the local market,” Lopes said. The flow of drugs was usually small and predictable. Often when the police made a seizure, they would make such a dent in the drug supply that local prices would skyrocket. But now police faced an unprecedented situation. As well as the 500kg of cocaine they had seized in the previous two weeks, Lopes thought that at least another 200kg were still unaccounted for.

Rabo de Peixe, the fishing village where Quinci had first moored his boat, is one of the poorest towns in Portugal, and locals told me that it was a place where even other islanders can feel like outsiders. But that summer, it became a hub for the sale of the missing cocaine. “People from all over the island came here to buy drugs,” Ruben Frias told me. From the town square, perched atop a promontory, narrow streets lined with pastel-coloured houses snake down to the harbour. In these streets, where fishermen hunch over dominos in grotty bars, slurping from small glasses of red wine, kilos and kilos of cocaine exchanged hands.

Later analysis showed that the cocaine was more than 80% pure, far stronger than anything normally found on the street. The drug’s potency made it highly addictive, and many people who started using had little idea what they were dealing with. Francisco Moreira, a local judge, told me that Quinci’s drug made it into the hands of the islanders at a time when many people here had little experience with cocaine.

The results were catastrophic. Mariano Pacheco, a medic and coroner at Ponta Delgada’s hospital, told me that in the weeks after Quinci’s arrival an unusually high number of people were coming into the hospital reporting heart attack-like symptoms, or arriving unconscious. “We revived a lot of people from drug-induced comas,” he said. “Some of them didn’t make it.”

A month after Quinci had arrived on the island, the cocaine was still wreaking havoc. On 7 July, the front page of the Açoriano Oriental opened with the headline “Cocaine kills on São Miguel”. The article reported a spike in the number of overdoses and the death of a young man. Local television networks began broadcasting health warnings to the islanders advising them not to try the cocaine. But it was too late for some.

The prison at Ponta Delgada, where Quinci was sent to await trial, looks like a brutalist castle and looms over the main road heading out of town. According to a witness cited in court documents, while in jail Quinci was often on the phone, talking in Spanish and trying to secure a scooter or rental car. In exchange for help in escaping the prison, Quinci had offered to draw maps for other inmates that would lead them to the cocaine.

On the morning of 1 July, about a week and a half after his arrest, Quinci entered a courtyard of the jail for his designated recreation time. His arms were wrapped in ripped bed sheets to protect them from cuts: the yard was surrounded by a long, low wall topped with barbed wire. At around 11.25am, Quinci started to climb.

From one of the white hexagonal guard towers, a correctional officer named Antonio Alonso fired a warning shot from his rifle, but Quinci kept climbing. Alonso then aimed his sight directly at the fugitive, and placed his finger on the trigger. Below, prisoners had gathered and were cheering Quinci on. On the other side of the wall, Alonso could see civilians walking up and down a promenade on the main road. “I was afraid that I might hurt someone if I fired a shot,” he would later testify. He watched as Quinci went over the wall, up the road, on to a small scooter and into the distance.

The prison in Ponta Delgada from which Quinci escaped. Photograph: Stefan Sollfors//Alamy

Police were immediately alerted of the escape and moved to seal off the island. Pictures of Quinci were sent to all ports on São Miguel and the airport in Ponta Delgada. On 3 July, the Açoriano Oriental asked readers to report any sightings of Quinci to the authorities. Rumours circulated that he was sleeping rough in fields, church lofts and chicken sheds, snorting cocaine to stave off his appetite. Eventually, he ended up in the house of a man named Rui Couto, who lived in a village 26 miles north-east of Ponta Delgada.

When I met Couto, who is now in his late 40s and has a tattoo on the left side of his shaved head, he seemed nervous and agitated, and wore clothes that were too big for his skinny frame. Like many islanders, he had moved to the US when he was young. But he was forced to leave after being busted for drug possession. “They caught me with six joints,” he told me in a thick Massachusetts accent. He came back to São Miguel in his early 20s.

When Quinci arrived at Couto’s house, the Italian was covered in blood. “He had sweatpants and his socks up, but the barbed wire ripped his ankles,” Couto said. It was the day of Couto’s son’s baptism, and his whole family was in a garden terrace at the back of his house. Couto claims Quinci was brought to the house by an acquaintance of his. He also told me he gave Quinci refuge out kindness and that there was no deal or plan with the Italian. “He didn’t pay me nothing!” he said. “I’m a good guy, I was raised with values.”

Quinci stayed in a chicken shed at the bottom of a potato field behind Couto’s garden for around two weeks. The pair would often eat together and talk late into the night. Couto told me that although Quinci was in a sorry state, smoking cocaine in cigarette papers without tobacco, he was always friendly. “He was a good guy, and I miss him,” he said.

Couto said that someone Quinci knew came round to give him a fake passport and money. A relative of Quinci had supposedly bought him a boat in Madeira, another Portuguese island 620 miles to the south-east, and was planning to smuggle him off São Miguel as soon as possible. “He was all set to go, they were going to pick him up down there,” Couto told me, pointing to a bay some 200 metres from the back of his house. “But then, well, they didn’t.”

Couto said he had been up late with a friend on the night before the police arrived. Around 7am on 16 July, he heard people shouting outside the house. Couto opened the door in his underpants and a squadron of armed police burst through the front door.

According to Lopes, who was part of the raid, they were working off a tip from a police colleague who believed Couto was hiding cocaine at his house. But after checking under beds, sofas, cabinets and in toilet cisterns, the officers found nothing. Lopes and a colleague decided to check the stone shed at the bottom of Couto’s potato field. The inside was covered in hay and smelled strongly of manure. There didn’t seem to be anything of interest inside. But then, Lopes heard a noise. At first, he thought it was a cat, “but something told me I needed to search more”.

They found Quinci hiding in a corner, dirty and dishevelled. “We didn’t know Quinci was there,” Lopes said. “We were there to search for drugs. It was the biggest stroke of luck.”

In the span of just a few weeks, Quinci’s cocaine had profoundly changed life on São Miguel. But that was just the immediate aftermath of his arrival. When I travelled to the island earlier this year, the long-term effects of Quinci’s cocaine were evident.

The same year that Quinci arrived on São Miguel, Portugal decriminalised the personal possession and consumption of illicit substances, and redirected resources to prevention and recovery services. Outside Rabo de Peixe, I waited with a group of drug users for the local methadone van, which travels around the island treating people for heroin addiction. That morning, about 20 addicts clustered near a kennel of snarling Azorean cattle dogs. Most of the addicts were gaunt with jaundiced eyes, rotting teeth and grey, wrinkled skin. Small children accompanied a few of the users, while most came alone and spoke to no one, smoking and staring at the tarmac.

The users who agreed to speak with me said that Quinci’s arrival on São Miguel had changed the island in surprising ways. Several people told me that a number of locals had become rich thanks to the Italian’s cocaine, then started legitimate businesses, such as coffee shops, many of which still exist today.

But the drugs also had more damaging long-term effects. Several of the users told me that Quinci’s cocaine was so potent that they started taking other drugs to lessen the symptoms of withdrawal. They became addicted to heroin, which was shipped in from the continent, often via the postal service. Alberto Peixoto, a local sociologist who has conducted studies on drug use in the Azores, confirmed that the arrival of Quinci’s cocaine increased consumption of other illicit substances, and that young people and adults from poorer parts of the island were the ones most affected. “It completely ruined my life,” said one local who had become addicted to Quinci’s cocaine and then to heroin. “I’m still living with consequences to this day.”

After he was re-arrested, Quinci was put on trial in Ponta Delgada and given 11 years for drug-trafficking, the use of a false identity and escaping from prison. The decision was appealed and sent to the courts in Lisbon, which reduced the sentence to 10 years. (The other two yachts that were part of the smuggling operation, the Lorena and the Julia, were impounded in July 2001 in Spain by the Spanish police.)

According to Europol, the pan-European police agency, the Caribbean-Azores route is now a mainstay of international drug trafficking. Criminals use the islands as a pit stop, where cargo is usually transferred to fishing vessels or speedboats for shipment to mainland Portugal or Spain. Last September, a catamaran sailing under a French flag was impounded near the Azorean island of Faial with 840kg of cocaine on board.

After the methadone truck left for its next stop, I took a drive along the island’s northern coast, near where Quinci’s yacht had first been sighted. My journey cut through towns of whitewashed buildings with terracotta roofs, past rich green pastures, walled off like squares on a chessboard. Farmers squelched through the soggy fields while portly Holstein-Friesian cows grazed. In the soupy, tropical air, everything seemed settled and staid. But, as I reached the north-eastern tip of the island, I saw the Atlantic stretching out to the horizon like a sheet of rippled slate. And some miles out, a white sail boat was rocking back and forth in the afternoon swell.

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