When Medellin drug lords wanted to expand their money laundering, they turned to emeralds.

A decade ago, they approached Colombia's top gem traders for a marriage of convenience, hoping to gain access to the Magdalena River for drug shipping. Instead, the power play set off a bloody interlude marked by barroom brawls and gangland-style slayings, with the body of one reluctant emerald dealer tossed from a plane onto his mines.It ended with one man, Victor Carranza, emerging victorious and building a legend. He owns two of Colombia's four major emerald mining concessions and owns a large share in a third mine.

Once at the top, Carranza became the most powerful proponent of cleaning up the country's sizable emerald trade, by creating a commodities market to regulate quality, pricing and payment. Just a year ago, he worked alongside government ministers to organize an international conference of emerald traders to push for the idea.

But by the time the traders gathered here recently to hear the pitch, Carranza was in hiding. Before the conference ended, he had been arrested and charged with raising a paramilitary army of 2,000 men.

According to a U.S. government report last year, Carranza's private army operated as a death squad, and American intelligence officials say he is also a major drug trafficker and arms smuggler.

Colombian emerald dealers, who praise Carranza for cleaning up the business - albeit with a bloodbath - were demoralized and disoriented by his arrest. They insist that he was not captured but had turned himself in, since he did not put up a fight.

Despite a worldwide crisis of confidence in the precious gem trade that preceded Carranza's arrest, and an atmosphere of violence that was making gem traders avoid Colombia, the trade has not collapsed with Carranza's absence.