The code word was ``Perez & Co.'' With that signal, 21 containers of goods shipped from Miami to Curacao were diverted to Cuba in the biggest scheme to violate the U.S. embargo ever uncovered in South Florida.

One Spaniard is in jail, four other foreigners have been identified as buyers for Cuba, and prosecutors are targeting at least a half-dozen Miami Cubans, including a Mariel refugee photographed with President Fidel Castro.

U.S. officials say they are also investigating reports that Cuban exiles who own a Miami refrigeration firm and a trading agency in Panama have been knowingly shipping goods bought here for Cuba.

Even as the Clinton administration has tightened the 35-year-old trade ban, violations have been on the rise -- from major cases like Americans who invest in Cuba to the small-potato cases of illegal visitors to the island.

``Violations of the embargo are as old as the embargo itself, only limited by people's imagination,'' said Keith Prager, the Customs official in charge of Miami investigations. ``But the activity is in fact increasing.''

Added Prager: ``The paradox is that the biggest violators of the embargo on Cuba are Cuban Americans right here in Miami.''

The reasons for the increase appear to be twofold:

Although Cuba long owned firms in Panama and other countries that buy U.S. goods from local firms more or less legally, after Soviet aid ended in 1991, it had to cut out some middlemen and seek cheaper prices in America.

Some American business people, meanwhile, rushed to Cuba, hoping to secure a front-row seat for the boom that they expect if U.S. trade sanctions are lifted because of changes in Washington or Havana's leadership.

``I do nothing illegal. I listen. I watch. Because when it opens, brother, it's going to be great,'' said Hector Rivas, a Puerto Rican businessman who acknowledged that he spends about half his time in Cuba.

Most violations appear to be in the area of travel and cash remittances to Cuba, with the numbers estimated to be remaining constant, despite President Clinton's tightening of regulations in the past two years.

Contraband cigars

Cigar smuggling has leaped, along with the U.S. boom in cigar smoking. Some of the smugglers are big-time entrepreneurs, although most are travelers returning from Cuba with one or two illegal boxes.

``We just seize the cigars. To go after civil penalties would be too much work,'' said Ray Vargas, Customs agent in Puerto Rico.

U.S. Customs focuses mostly ``on major cases of high-level commerce with Cuba,'' Prager said, ``because they have the biggest payoffs but are also the most difficult to investigate and most difficult to prove.''

U.S. prosecutors in Miami say they have averaged two to three such major cases a year since 1990. The biggest became public last month, with the arrest in Miami of Javier Ferreiro, a Spaniard living in Cuba.

The case dates back to early 1995, when Miami shipping company owner Irma Henneberg -- arrested in an unrelated case -- turned state's evidence in a scheme involving the smuggling of goods from Miami to Cuba.

Buyers working for Cuba were buying goods in Miami and using Henneberg's Continental Shipping Corp. to consign them for shipment to three Cuban-owned front companies in Curacao, federal court records show.

Secret rerouting

Henneberg, working under a signed contract with Melfi Marine, a Cuban-owned firm in the Dominican Republic, diverted those shipments to Melfi for secret rerouting to Havana. The flag for the special cargo was the words ``Perez & Co.'' on the shipping manifest, the records showed.

Twenty-one containers loaded with food, furniture, electronic goods and sanitary napkins valued at $463,000 were shipped in that manner over a period of almost two years, Prager said.

Prosecution documents filed in the Ferreiro case allege that he was one of two Spanish businessmen who used this route, along with two Italians and a Canadian. Ferreiro faces charges of trading with the enemy, conspiracy and money laundering -- hiding the source of his money.

One affidavit notes that Customs has copies of Ferreiro faxes from Cuba discussing purchases with two Miami firms owned by a Cuban American and a Spaniard. The owners of Central Trading International and Sesin International declined to comment on the case.

U.S. officials have served search warrants on some 15 South Florida firms suspected of trading with Cuba and are focusing on at least six owned by Cuban Americans, including one who immigrated during the 1980 Mariel boatlift. A search of his office turned up a photograph of him shaking hands with Castro during a trip to Cuba, they said.

Official warning

``This is a warning to people that if you want to violate the embargo against Cuba, you'll have to pay the price,'' Prager said after Ferreiro's arrest.

But such words ring hollow to most people knowledgeable about Cuba's foreign trade.

``The welcome mat continues to be very long and wide for Americans in Cuba,'' said John Kavulich of the New York-based U.S.-Cuba Trade and Economic Council. ``Without question, the number of [Americans] doing business in Cuba outside the legal envelope is growing.''

Kavulich said the U.S. businessmen in Cuba usually represent smaller firms and that while most are of Cuban descent and from South Florida, he has seen Americans in Cuba from all corners of the United States.

Interest from California residents seems to be especially strong in recent months, he added, as evidenced by Cubana de Aviacion's new Tijuana-to-Havana flights.

Puerto Ricans

But a large portion of the business interest in Cuba appears to be coming from Puerto Ricans, who share the Spanish language with Cubans yet enjoy U.S. citizenship and the experience of a capitalist economy.

Just last month, 40 senior executives of Puerto Rican companies spent five days in Cuba on a well-publicized trip to ``gain a better understanding'' of the island, said organizer Pablo Jose Rivera of Hispania Research.

Many Puerto Ricans are in Cuba illegally, however, confident that U.S. authorities will never prosecute a simple case of travel violations or get enough evidence to prosecute them for anything worse.

``I am in Cuba a lot. I don't live in Cuba,'' said Rivas, a land surveyor from Puerto Rico's central mountain town of Orocovis. ``And if to feed myself in Cuba I have to violate some law, I am not going to starve.''

Rivas said he has spent about half his time in Cuba since 1995 exploring opportunities for business when the embargo is lifted.

``We have 37 years of business experience on Cuba,'' he told The Herald.

Bending rules

He insisted that he was doing nothing illegal in Cuba beyond being there without the required U.S. Treasury Department license to spend money in Cuba. But he signed documents and made statements that raise eyebrows.

Rivas confirmed that he and a Miami-based business partner, John P. Stephens Rexach, took eight businessmen on a one-week trip to Cuba in early 1996. Their written invitations said the trip was ``to explore the possibility -- without any commitments -- of establishing commercial relations in Cuba.''

Although the invitations included blank applications for Treasury Department licenses, department officials in Washington said no member of the group ever applied. Stephens did not return several Herald telephone calls.

Three friends in Puerto Rico said Rivas told them he had invested in a chicken farm in western Pinar del Rio province and paid $30,000 for a house in Havana. Rivas said he had only ``explored'' the chicken deal but backed off and noted that foreigners can't legally own homes in Cuba.

He was flying back to Havana by way of Santo Domingo in two days' time, he said in the interview, apparently unconcerned about any possible U.S. sanctions.

Perhaps he was right. A former employee involved in a monetary dispute with Rivas reported his Cuba connections to the FBI in Puerto Rico and to journalists last November.

Five months later, he has yet to be contacted by U.S. Customs or the Immigration and Naturalization Service.

     Herald staff writer David Lyons contributed to this report.

Copyright © 1997 The Miami Herald