In 1977, a Columbian of German ancestory named Carlos Lehder, who was a part of the Medellin cocaine Cartel, bought a villa on Norman's Cay. Carlos was apparently a quite a forceful flamboyant character with big ideas. His idea was that drug running could be even more profitable if small planes were used to fly cocaine in to the States, rather than using human mules flying commercial flights with suitcases full of drugs.
In 1979, he bought half of the 650 acre Norman's Cay for $900,000.00. His purchase (under the aegis of International Dutch Resources, Inc.) included the old Norman's Cay Yacht club, dock and airstrip. Now, boaters were often chased away by guards with guns, and there was at least one sailboat found with several dead bodies aboard in the area.
All this activity soon attracted the attention of the DEA of course. Their task force (called Operation Caribe) had the cay under surveillance from a Coast Guard cutter offshore, from agents on Shroud Cay, and from agents who were disguised as boaters feigning mechanical breakdown.
Fondest memory: Lehder was arrested during a raid in 1979, but he had been tipped off and the cay was spotless, and it is said that he was released after supplying the Bahamian police officers with a suitcase which was said to contain $250,000. An irate DEA official charged that Lehder owned "..the whole damned country".
The DEA began arresting Lehder's pilots and confiscating his shipments. In 1981 they handed down a 39 count indictment against him and 13 others, but Carlos was not too concerned based on previous actions of the Bahamian government. In 1983, an NBC News broadcast implicated the Bahamian Government including the Prime Minister, but no charges were ever filed.
After his new plane crashed into the water east of the marina dock, he left the cay and began living as a fugitive in Columbia. He was finally captured there and extradited to the US, where he was convicted and sentenced to life without parole plus 135 years. His exact prison location is apparently a secret. For more information on Lehder, check a PBS Frontline story. In addition, there is an interview with George Jung which was also done by Frontline.
The 2001 movie "Blow" starring Penelope Cruz, with Johnny Depp as George Jung was supposedly filmed or set on Norman's Cay. George met Carlos in prison in 1974 before he bought Normans.
When the DEA finally caught Carlos, George Jung was one of the main witnesses and he walked away from any prosecution or prison sentence in return for his testimony. However, he couldn't stay away from smuggling for which he is currently in prison until 2014 when he will be 72 years old.